Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 03, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'CNL Healthcare Properties, Inc. | ' |
Entity Central Index Key | '0001496454 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 100,038,382 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real estate assets: | ' | ' |
Real estate investment properties, net (including VIEs $111,838 and $72,053, respectively) | $1,361,777 | $848,791 |
Real estate under development, including land (including VIEs $29,720 and $16,210, respectively) | 29,720 | 17,409 |
Total real estate assets, net | 1,391,497 | 866,200 |
Intangibles, net (including VIEs $11,166 and $4,535, respectively) | 105,122 | 52,400 |
Cash (including VIEs $7,314 and $727, respectively) | 83,483 | 44,209 |
Loan costs, net (including VIEs $1,869 and $912, respectively) | 11,232 | 7,919 |
Other assets (including VIEs $314 and $21, respectively) | 9,522 | 6,445 |
Investments in unconsolidated entities | 7,627 | 18,438 |
Restricted cash (including VIEs $459 and $257, respectively) | 6,379 | 2,839 |
Deferred rent (including VIEs $247 and $104, respectively) | 4,725 | 2,782 |
Deposits | 3,533 | 8,892 |
Note receivable from related party | ' | 3,949 |
Total assets | 1,623,120 | 1,014,073 |
Liabilities: | ' | ' |
Mortgage and other notes payable, net (including VIEs $84,560 and $52,596 respectively) | 699,591 | 438,107 |
Revolving credit facility | 180,615 | 98,500 |
Other liabilities (including VIEs $1,581 and $939, respectively) | 19,964 | 7,243 |
Accounts payable and accrued expenses (including VIEs $829 and $309, respectively) | 17,363 | 7,887 |
Accrued development costs (including VIEs $4,683 and $7,047, respectively) | 4,683 | 7,047 |
Due to related parties (including VIEs $643 and $112, respectively) | 2,654 | 3,308 |
Total liabilities | 924,870 | 562,092 |
Commitments and contingencies (Note 15) | ' | ' |
Redeemable noncontrolling interests | 568 | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.01 par value per share, 200,000 shares authorized; none issued or outstanding | 0 | 0 |
Excess shares, $0.01 par value per share, 300,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value per share, 1,120,000 shares authorized, 94,122 and 58,308 shares issued, and 93,799 and 58,218 shares outstanding, respectively | 938 | 582 |
Capital in excess of par value | 805,264 | 500,361 |
Accumulated loss | -67,610 | -30,580 |
Accumulated distributions | -39,100 | -17,423 |
Accumulated other comprehensive loss | -1,810 | -959 |
Total stockholders' equity | 697,682 | 451,981 |
Total liabilities and equity | $1,623,120 | $1,014,073 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Real estate investment properties, net | $1,361,777 | $848,791 |
Real estate under development, including land | 29,720 | 17,409 |
Intangible assets, net | 105,122 | 52,400 |
Cash | 83,483 | 44,209 |
Loan costs, net | 11,232 | 7,919 |
Other assets | 9,522 | 6,445 |
Restricted cash | 6,379 | 2,839 |
Deferred rent | 4,725 | 2,782 |
Mortgage and other notes payable, net | 699,591 | 438,107 |
Other liabilities | 19,964 | 7,243 |
Accounts payable and accrued expenses | 17,363 | 7,887 |
Accrued development costs | 4,683 | 7,047 |
Due to related parties | 2,654 | 3,308 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Excess shares, par value | $0.01 | $0.01 |
Excess shares, shares authorized | 300,000 | 300,000 |
Excess shares, shares issued | 0 | 0 |
Excess shares, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 1,120,000 | 1,120,000 |
Common stock, shares issued | 94,122 | 58,308 |
Common stock, shares outstanding | 93,799 | 58,218 |
VIEs | ' | ' |
Real estate investment properties, net | 111,838 | 72,053 |
Real estate under development, including land | 29,720 | 16,210 |
Intangible assets, net | 11,166 | 4,535 |
Cash | 7,314 | 727 |
Loan costs, net | 1,869 | 912 |
Other assets | 314 | 21 |
Restricted cash | 459 | 257 |
Deferred rent | 247 | 104 |
Mortgage and other notes payable, net | 84,560 | 52,596 |
Other liabilities | 1,581 | 939 |
Accounts payable and accrued expenses | 829 | 309 |
Accrued development costs | 4,683 | 7,047 |
Due to related parties | $643 | $112 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Rental income from operating leases | $13,393 | $7,251 | $33,478 | $14,803 |
Resident fees and services | 34,162 | 6,537 | 86,636 | 15,382 |
Tenant reimbursement income | 1,957 | 950 | 4,787 | 960 |
Interest income on note receivable from related party | 148 | 34 | 498 | 38 |
Total revenues | 49,660 | 14,772 | 125,399 | 31,183 |
Expenses: | ' | ' | ' | ' |
Property operating expenses | 25,716 | 5,501 | 64,703 | 12,049 |
General and administrative | 1,997 | 1,158 | 5,689 | 3,835 |
Acquisition fees and expenses | 3,729 | 6,694 | 15,726 | 9,638 |
Asset management fees | 2,753 | 1,208 | 5,572 | 2,795 |
Property management fees | 2,358 | 682 | 6,118 | 1,623 |
Contingent purchase price consideration adjustment | 1,800 | ' | 479 | ' |
Depreciation and amortization | 17,550 | 4,566 | 44,111 | 9,448 |
Total expenses | 55,903 | 19,809 | 142,398 | 39,388 |
Operating loss | -6,243 | -5,037 | -16,999 | -8,205 |
Other income (expense): | ' | ' | ' | ' |
Interest and other income | 7 | 53 | 27 | 55 |
Interest expense and loan cost amortization | -8,549 | -2,091 | -21,654 | -7,006 |
Equity in earnings (loss) of unconsolidated entities | -180 | 284 | -1,193 | 1,744 |
Gain on sale of investment in unconsolidated entity | ' | 4,486 | ' | 4,486 |
Gain on purchase of controlling interest of investment in unconsolidated entity | 2,798 | ' | 2,798 | ' |
Total other expense | -5,924 | 2,732 | -20,022 | -721 |
Loss before income taxes | -12,167 | -2,305 | -37,021 | -8,926 |
Income tax expense | -37 | ' | -9 | -18 |
Net loss | -12,204 | -2,305 | -37,030 | -8,944 |
Less: Net loss attributable to noncontrolling interest | ' | ' | ' | ' |
Net loss attributable to common stockholders | ($12,204) | ($2,305) | ($37,030) | ($8,944) |
Net loss per share of common stock (basic and diluted) | ($0.14) | ($0.05) | ($0.50) | ($0.26) |
Weighted average number of shares of common stock outstanding (basic and diluted) | 85,649 | 44,436 | 74,348 | 34,235 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net loss | ($12,204) | ($2,305) | ($37,030) | ($8,944) |
Other comprehensive income (loss): | ' | ' | ' | ' |
Unrealized gain (loss) on derivative financial instruments, net | 224 | -1,230 | -872 | -1,230 |
Unrealized gain (loss) on derivative financial instruments of equity method investments | -2 | -69 | 21 | 62 |
Total other comprehensive income (loss) | 222 | -1,299 | -851 | -1,168 |
Comprehensive loss | -11,982 | -3,604 | -37,881 | -10,112 |
Less: Comprehensive loss attributable to noncontrolling interest | ' | ' | ' | ' |
Comprehensive loss attributable to common stockholders | ($11,982) | ($3,604) | ($37,881) | ($10,112) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (USD $) | Total | Common Stock | Capital in Excess of Par Value | Accumulated Loss | Accumulated Distributions | Accumulated Other Comprehensive Income (Loss) | Redeemable Noncontrolling Interests |
In Thousands | |||||||
Beginning Balance at Dec. 31, 2012 | $140,651 | $184 | $156,200 | ($12,480) | ($3,253) | ' | ' |
Beginning Balance (in shares) at Dec. 31, 2012 | ' | 18,446 | ' | ' | ' | ' | ' |
Subscriptions received for common stock through public offering and reinvestment plan (in shares) | ' | 38,798 | ' | ' | ' | ' | ' |
Subscriptions received for common stock through public offering and reinvestment plan | 387,363 | 388 | 386,975 | ' | ' | ' | ' |
Stock distributions | ' | 11 | -11 | ' | ' | ' | ' |
Stock distributions, shares | ' | 1,063 | ' | ' | ' | ' | ' |
Redemptions of common stock | -827 | -1 | -826 | ' | ' | ' | ' |
Redemption of common stock, shares | ' | -89 | ' | ' | ' | ' | ' |
Stock issuance and offering costs | -41,977 | ' | -41,977 | ' | ' | ' | ' |
Net loss | -18,100 | ' | ' | -18,100 | ' | ' | ' |
Other comprehensive loss | -959 | ' | ' | ' | ' | -959 | ' |
Cash distributions, declared and paid or reinvested ($0.39996 per share in 2013 and $0.3042 per share in 2014) | -14,170 | ' | ' | ' | -14,170 | ' | ' |
Ending Balance at Dec. 31, 2013 | 451,981 | 582 | 500,361 | -30,580 | -17,423 | -959 | ' |
Ending Balance (in shares) at Dec. 31, 2013 | 58,218 | 58,218 | ' | ' | ' | ' | ' |
Subscriptions received for common stock through public offering and reinvestment plan (in shares) | ' | 34,209 | ' | ' | ' | ' | ' |
Subscriptions received for common stock through public offering and reinvestment plan | 345,854 | 342 | 345,512 | ' | ' | ' | ' |
Stock distributions | ' | 16 | -16 | ' | ' | ' | ' |
Stock distributions, shares | ' | 1,605 | ' | ' | ' | ' | ' |
Redemptions of common stock | -2,124 | -2 | -2,122 | ' | ' | ' | ' |
Redemption of common stock, shares | ' | -233 | ' | ' | ' | ' | ' |
Stock issuance and offering costs | -36,471 | ' | -36,471 | ' | ' | ' | ' |
Net loss | -37,030 | ' | ' | -37,030 | ' | ' | ' |
Other comprehensive loss | -851 | ' | ' | ' | ' | -851 | ' |
Cash distributions, declared and paid or reinvested ($0.39996 per share in 2013 and $0.3042 per share in 2014) | -21,677 | ' | ' | ' | -21,677 | ' | ' |
Distribution to holder of promoted interest | -2,000 | ' | -2,000 | ' | ' | ' | ' |
Contribution from redeemable noncontrolling interests | ' | ' | ' | ' | ' | ' | 568 |
Ending Balance at Sep. 30, 2014 | $697,682 | $938 | $805,264 | ($67,610) | ($39,100) | ($1,810) | $568 |
Ending Balance (in shares) at Sep. 30, 2014 | 93,799 | 93,799 | ' | ' | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (Parenthetical) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Cash distributions, declared and paid per share | $0.30 | $0.40 |
CONDENSED_CONSOLIDATED_STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | |
Operating activities: | ' | ' | |
Net cash flows provided by operating activities | $18,673 | $3,282 | |
Investing activities: | ' | ' | |
Acquisition of properties | -524,654 | -311,437 | |
Development of properties | -32,893 | -16,169 | |
Issuance of note receivable to related party | -2,065 | -2,647 | |
Collection of note receivable from related party | 5,591 | ' | |
Distribution from unconsolidated entities | 2,206 | ' | |
Purchase of controlling interest in unconsolidated entity | -1,584 | ' | |
Investment in unconsolidated entities | -220 | -12,175 | |
Proceeds from sale of unconsolidated entity | ' | 61,761 | |
Changes in restricted cash | -3,539 | -1,237 | |
Capital expenditures | -2,570 | -180 | |
Payment of tenant improvements | -797 | ' | |
Payment of leasing costs | -324 | -12 | |
Deposits on real estate | -2,950 | -14,070 | |
Net cash used in investing activities | -563,799 | -296,166 | |
Financing activities: | ' | ' | |
Subscriptions received for common stock through public offering | 333,960 | 283,893 | |
Payment of stock issuance and offering costs | -36,575 | -30,607 | |
Distributions to stockholders, net of distribution reinvestments | -9,782 | -4,209 | |
Distribution to holder of promoted interest | -2,000 | ' | |
Contribution from redeemable noncontrolling interest | 568 | ' | |
Redemptions of common stock | -1,068 | -424 | |
Draws under revolving credit facility | 112,115 | ' | |
Repayment on revolving credit facility | -30,000 | ' | |
Proceeds from mortgage and other notes payable | 245,587 | 197,580 | |
Principal payments on mortgage and other notes payable | -24,096 | -116,566 | |
Lender deposits | -335 | -5,261 | |
Payment of loan costs | -3,974 | -4,302 | |
Net cash flows provided by financing activities | 584,400 | 320,104 | |
Net increase in cash | 39,274 | 27,220 | |
Cash at beginning of period | 44,209 | 18,262 | |
Cash at end of period | 83,483 | 45,482 | |
Amounts incurred but not paid (including amounts due to related parties): | ' | ' | |
Stock issuance and offering costs | 650 | 837 | |
Accrued development costs | 4,683 | 3,070 | |
Redemptions payable | 1,178 | 282 | |
Contingent purchase price consideration | ' | 507 | |
Unrealized loss on derivative financial instruments, net | 1,798 | 1,168 | |
Assumption of mortgage note payable on acquisition of property | $27,657 | [1] | ' |
[1] | At the acquisition date, the fair value of the mortgage note payable assumed reflects an approximate $0.4 million premium on the above-market mortgage note payable assumed. |
Organization
Organization | 9 Months Ended | |
Sep. 30, 2014 | ||
Organization | ' | |
1 | Organization | |
CNL Healthcare Properties, Inc. (the “Company”) is a Maryland corporation incorporated on June 8, 2010 that elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the year ended December 31, 2012. | ||
The Company is externally advised by CNL Healthcare Corp. (the “Advisor”) and its property manager is CNL Healthcare Manager Corp. (the “Property Manager”), each of which is a Florida corporation and a wholly owned subsidiary of CNL Financial Group, LLC, the Company’s sponsor. CNL Financial Group, LLC is an affiliate of CNL Financial Group, Inc. (“CNL”). The Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making acquisitions and investments on behalf of the Company pursuant to an advisory agreement among the Company, the operating partnership and the Advisor. Substantially all of the Company’s acquisition, operating, administrative and certain property management services are provided by affiliates of the Advisor and the Property Manager. In addition, third-party sub-property managers have been engaged by the Company to provide certain property management services. | ||
On June 27, 2011, the Company commenced its initial public offering of up to $3.0 billion of common stock (the “Offering”), including shares being offered from its distribution reinvestment plan (the “Reinvestment Plan”), pursuant to a registration statement on Form S-11 under the Securities Act of 1933, as amended. The shares were initially being offered at $10 per share and effective December 11, 2013 are being offered at $10.14 per share, or $9.64 per share pursuant to the Reinvestment Plan. In November 2014, the Company announced that, effective November 4, 2014, its shares will be offered at $10.58 per share, or $10.06 per share pursuant to the Reinvestment Plan. Additionally, the Company filed a follow-on registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) in connection with the proposed offering of up to $1 billion in shares of common stock (the “Follow-On Offering”). The Company plans to extend the Offering through the effective date of a subsequent continuous Follow-On Offering, which is expected to occur on or about January 30, 2015. As of the date of this filing, the registration statement for the Follow-On Offering had not been declared effective by the SEC. The Company expects to sell shares of its common stock in the Follow-On Offering until the earlier of the date on which the maximum offering amount has been sold, or December 31, 2015; provided, however, that it will periodically evaluate the status of the offering, and its board of directors may extend the offering beyond December 31, 2015 after taking into account such factors as it deems appropriate, including but not limited to, the amount of capital raised, future acquisition opportunities, and economic or market trends. | ||
The Company’s investment focus is on acquiring a diversified portfolio of healthcare real estate or real estate-related assets, primarily in the United States, within the senior housing, medical office, post-acute care and acute care asset classes. The types of senior housing that the Company may acquire include active adult communities (age-restricted and age-targeted housing), independent and assisted living facilities, continuing care retirement communities, and memory care facilities. The types of medical offices that the Company may acquire include medical office buildings, specialty medical and diagnostic service facilities, surgery centers, outpatient rehabilitation facilities, and other facilities designed for clinical services. The types of post-acute care facilities that the Company may acquire include skilled nursing facilities, long-term acute care hospitals and inpatient rehabilitative hospitals. The types of acute care facilities that the Company may acquire include general acute care hospitals and specialty surgical hospitals. The Company views, manages and evaluates its portfolio homogeneously as one collection of healthcare assets with a common goal to maximize revenues and property income regardless of the asset class or asset type. | ||
The Company primarily expects to lease its properties to third-party tenants under triple-net or similar lease structures, where the tenant bears all or substantially all of the costs including cost increases, for real estate taxes, utilities, insurance and ordinary repairs. However, the Company may also invest through other strategic investment types aimed to maximize stockholder value by generating sustainable cash flow growth and increasing the value of the Company’s healthcare assets, including leasing properties to wholly-owned taxable REIT subsidiaries (“TRS”) and engaging independent third-party managers under management agreements to operate the properties as permitted under REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”). In addition, the Company expects most investments will be wholly owned, although, the Company has and may continue to invest | ||
through partnerships with other entities where the Company believes it is appropriate and beneficial. The Company has and expects to continue to invest in new property developments or properties which have not reached full stabilization. Finally, the Company also may invest in and originate mortgage, bridge or mezzanine loans or in entities that make investments similar to the foregoing investment types. The Company generally makes loans to the owners of properties to enable them to acquire land, buildings, or to develop property. In exchange, the owner generally grants the Company a first lien or collateralized interest in a mortgage collateralized by the property or by interests in the entity that owns the property. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |
Sep. 30, 2014 | ||
Summary of Significant Accounting Policies | ' | |
2 | Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter or nine months ended September 30, 2014 may not be indicative of the results that may be expected for the year ending December 31, 2014. Amounts as of December 31, 2013 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||
The accompanying unaudited condensed consolidated financial statements include the Company’s accounts and the accounts of its wholly owned subsidiaries or subsidiaries for which the Company has a controlling financial interest, including the accounts of variable interest entities (“VIEs”) in which the Company is the primary beneficiary. All material intercompany accounts and transactions have been eliminated in consolidation. | ||
In accordance with the guidance for the consolidation of VIEs, the Company analyzes its variable interests, including loans, leases, guarantees, and equity investments, to determine if the entity in which it has a variable interest is a variable interest entity (“VIE”). The Company’s analysis includes both quantitative and qualitative reviews. The Company bases its quantitative analysis on the forecasted cash flows of the entity, and its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and financial agreements. The Company also uses its quantitative and qualitative analyses to determine if it is the primary beneficiary of the VIE, and if such determination is made, it includes the accounts of the VIE in its consolidated financial statements. | ||
Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods and the disclosure of contingent liabilities. For example, significant assumptions are made in the allocation of purchase price, the analysis of real estate impairments, the valuation of contingent assets and liabilities, and the valuation of restricted stock shares issued. Accordingly, actual results could differ from those estimates. | ||
Redeemable Noncontrolling Interest – The Company entered into a joint venture agreement with a third party and acquired a 95% membership interest. The Company’s joint venture partner acquired a 5% noncontrolling interest that includes a put option of its membership to the Company upon the occurrence of certain events that are not solely within the control of the Company and at price that is determinable upon exercising the option. The Company classifies redeemable equity securities in accordance with Accounting Standard Update (“ASU”) No. 2009-04, “Liabilities (Topic 480): Accounting for Redeemable Equity Instruments,” which requires that equity securities redeemable at the option of the holder be classified outside of permanent stockholders’ equity. Accordingly, the Company has classified these redeemable equity securities as redeemable noncontrolling interest within the accompanying condensed consolidated balance sheets and condensed consolidated statements of stockholders’ equity and redeemable noncontrolling interest. | ||
Promoted Interest Distributions – The Company accounts for distributions to holders of promoted interests in a manner similar to noncontrolling interests. The Company identifies the distributions to holders of promoted interests separately within the accompanying condensed consolidated statements of equity. During the nine months ended September 30, 2014, the Company made distributions of approximately $2.0 million to a holder of promoted interest related to HarborChase of Villages Crossing, which has been recorded as a reduction to capital in excess of par value in the accompanying condensed consolidated statement of stockholders’ equity and redeemable noncontrolling interest. | ||
Adopted Accounting Pronouncements — In February 2013, the Financial Accounting Standards Board (“FASB”) issued “ASU” No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.” This update clarified the guidance in subtopic 405 and requires entities to measure obligations resulting from joint and several liability arrangements for which total obligation is fixed at the reporting date. Entities are required to measure the obligation as the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus any additional amount the reporting entity expects to pay on behalf of its co-obligors. Additionally, the guidance requires entities to disclose the nature and amount of the obligations as well as other information about those obligations. Effective January 1, 2014, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows. | ||
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a similar Tax Loss, or a Tax Credit Carryforward Exists.” This update clarified the guidance in subtopic 740 and requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward to the extent one is available. Effective January 1, 2014, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows. | ||
Recent Accounting Pronouncements — In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This update changes the criteria for reporting discontinued operations where only disposals representing a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, such as a major line of business or geographical area, should be presented as a discontinued operation. This ASU is effective prospectively for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014 with early adoption permitted. The Company has determined that the amendments will impact the Company’s determinations of which future property disposals, if any, qualify as discontinued operations and will require additional disclosure about discontinued operations for future property disposals, if any. | ||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” as a new Accounting Standard Concept (“ASC”) topic (Topic 606). The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard further provides guidance for any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, lease contracts). This ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, with earlier adoption not permitted. ASU 2014-09 can be adopted using one of two retrospective application methods: 1) retrospectively to each prior reporting period presented or 2) as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the amendments of ASU 2014-09; however, these amendments could potentially have a significant effect on the Company’s consolidated financial position, results of operations or cash flows. |
Acquisitions
Acquisitions | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Acquisitions | ' | ||||||||||||||||
3 | Acquisitions | ||||||||||||||||
Real Estate Investment Properties — During the nine months ended September 30, 2014, the Company acquired the following 22 properties, which were comprised of 13 senior housing communities, three medical office buildings (“MOB”), three post-acute care hospitals, and three acute care hospitals: | |||||||||||||||||
Name and Location | Structure | Date | Purchase Price | ||||||||||||||
Acquired | (in thousands) | ||||||||||||||||
Acute Care | |||||||||||||||||
Houston Orthopedic & Spine Hospital | Triple-net Lease | 6/2/14 | $ | 49,000 | |||||||||||||
Bellaire, TX (“Houston”) | |||||||||||||||||
Medical Portfolio II Properties | |||||||||||||||||
Hurst Specialty Hospital | Modified Lease | 8/15/14 | 29,465 | ||||||||||||||
Hurst, TX (“Dallas/Fort Worth”) | |||||||||||||||||
Beaumont Specialty Hospital | Modified Lease | 8/15/14 | 33,600 | ||||||||||||||
Beaumont, TX (“Houston”) | |||||||||||||||||
Medical Office | |||||||||||||||||
Chula Vista Medical Arts Center - Plaza I | Modified Lease | 1/21/14 | 17,863 | (1) | |||||||||||||
Chula Vista, CA (“San Diego”) | |||||||||||||||||
Houston Orthopedic & Spine Hospital Medical Office Building | Modified Lease | 6/2/14 | 27,000 | ||||||||||||||
Bellaire, TX (“Houston”) | |||||||||||||||||
Lee Hughes Medical Building | Modified Lease | 9/29/14 | 29,870 | (1) | |||||||||||||
Glendale, CA (“Los Angeles”) | |||||||||||||||||
Post-Acute Care | |||||||||||||||||
Medical Portfolio II Properties | |||||||||||||||||
Oklahoma City Inpatient Rehabilitation Hospital | Modified Lease | 7/15/14 | 25,504 | ||||||||||||||
Oklahoma City, OK | |||||||||||||||||
Las Vegas Inpatient Rehabilitation Hospital | Modified Lease | 7/15/14 | 22,292 | ||||||||||||||
Las Vegas, NV | |||||||||||||||||
South Bend Inpatient Rehabilitation Hospital | Modified Lease | 7/15/14 | 20,240 | ||||||||||||||
Mishawaka, IN (“South Bend”) | |||||||||||||||||
Senior Housing | |||||||||||||||||
Pacific Northwest II Communities | |||||||||||||||||
Prestige Senior Living Auburn Meadows | Managed | 2/3/14 | 21,930 | ||||||||||||||
Auburn, WA (“Seattle”) | |||||||||||||||||
Prestige Senior Living Bridgewood | Managed | 2/3/14 | 22,096 | ||||||||||||||
Vancouver, WA (“Portland”) | |||||||||||||||||
Prestige Senior Living Monticello Park | Managed | 2/3/14 | 27,360 | ||||||||||||||
Longview, WA | |||||||||||||||||
Prestige Senior Living Rosemont | Managed | 2/3/14 | 16,877 | ||||||||||||||
Yelm, WA | |||||||||||||||||
Prestige Senior Living West Hills | Managed | 3/3/14 | 14,986 | ||||||||||||||
Corvallis, OR | |||||||||||||||||
South Bay II Communities | |||||||||||||||||
Isle at Cedar Ridge | Managed | 2/28/14 | 21,630 | ||||||||||||||
Cedar Park, TX (“Austin”) | |||||||||||||||||
HarborChase of Plainfield | Managed | 3/28/14 | 26,500 | ||||||||||||||
Plainfield, IL | |||||||||||||||||
Legacy Ranch Alzheimer’s Special Care Center | Managed | 3/28/14 | 11,960 | ||||||||||||||
Midland, TX | |||||||||||||||||
The Springs Alzheimer’s Special Care Center | Managed | 3/28/14 | 10,920 | ||||||||||||||
San Angelo, TX | |||||||||||||||||
Isle at Watercrest – Bryan | Managed | 4/21/14 | 22,050 | ||||||||||||||
Bryan, TX | |||||||||||||||||
Watercrest at Bryan | Managed | 4/21/14 | 28,035 | ||||||||||||||
Bryan, TX | |||||||||||||||||
Isle at Watercrest – Mansfield | Managed | 5/5/14 | 31,300 | ||||||||||||||
Mansfield, TX (“Dallas/Fort Worth”) | |||||||||||||||||
Watercrest at Mansfield | Managed | 6/30/14 | 49,000 | ||||||||||||||
Mansfield, TX (“Dallas/Fort Worth”) | |||||||||||||||||
$ | 559,478 | ||||||||||||||||
FOOTNOTE: | |||||||||||||||||
-1 | This represents a single property acquisition that is not considered material to the Company and as such no pro forma financial information has been included related to this property. | ||||||||||||||||
During the nine months ended September 30, 2013, the Company acquired the following properties, which were comprised of 13 medical office buildings, six post-acute care facilities, three senior housing communities, and one acute care hospital: | |||||||||||||||||
Name and Location | Structure | Date | Purchase Price | ||||||||||||||
Acquired | (in thousands) | ||||||||||||||||
Acute Care | |||||||||||||||||
Medical Portfolio I Properties | |||||||||||||||||
Doctors Specialty Hospital | Modified Lease | 8/16/13 | $ | 10,003 | |||||||||||||
Leawood, KS (“Kansas City”) | |||||||||||||||||
Medical Office | |||||||||||||||||
LaPorte Cancer Center | Modified Lease | 6/14/13 | 13,100 | ||||||||||||||
Westville, IN | |||||||||||||||||
Knoxville Medical Office Properties | |||||||||||||||||
Physicians Plaza A at North Knoxville Medical Center | Modified Lease | 7/10/13 | 18,124 | ||||||||||||||
Powell, TN (“Knoxville”) | |||||||||||||||||
Physicians Plaza B at North Knoxville Medical Center | Modified Lease | 7/10/13 | 21,800 | ||||||||||||||
Powell, TN (“Knoxville”) | |||||||||||||||||
Jefferson Medical Commons | Modified Lease | 7/10/13 | 11,616 | ||||||||||||||
Jefferson City, TN (“Knoxville”) | |||||||||||||||||
Physicians Regional Medical Center - Central Wing Annex | Modified Lease | 7/10/13 | 5,775 | ||||||||||||||
Knoxville, TN | |||||||||||||||||
Medical Portfolio I Properties | |||||||||||||||||
John C. Lincoln Medical Office Plaza I | Modified Lease | 8/16/13 | 4,420 | ||||||||||||||
Phoenix, AZ | |||||||||||||||||
John C. Lincoln Medical Office Plaza II | Modified Lease | 8/16/13 | 3,106 | ||||||||||||||
Phoenix, AZ | |||||||||||||||||
North Mountain Medical Plaza | Modified Lease | 8/16/13 | 6,185 | ||||||||||||||
Phoenix, AZ | |||||||||||||||||
Escondido Medical Arts Center | Modified Lease | 8/16/13 | 15,602 | ||||||||||||||
Escondido, CA (“San Diego”) | |||||||||||||||||
Chestnut Commons Medical Office Building | Modified Lease | 8/16/13 | 20,205 | ||||||||||||||
Elyria, OH (“Cleveland”) | |||||||||||||||||
Calvert Medical Office Properties | |||||||||||||||||
Calvert Medical Office Buildings I, II, III | Modified Lease | 8/30/13 | 16,409 | ||||||||||||||
Prince Frederick, MD (“Washington D.C.”) | |||||||||||||||||
Calvert Medical Arts Center | Modified Lease | 8/30/13 | 19,320 | ||||||||||||||
Prince Frederick, MD (“Washington D.C.”) | |||||||||||||||||
Dunkirk Medical Center | Modified Lease | 8/30/13 | 4,617 | ||||||||||||||
Dunkirk, MD (“Washington D.C.”) | |||||||||||||||||
Post-Acute Care | |||||||||||||||||
Perennial Communities | |||||||||||||||||
Batesville Healthcare Center | Triple-net Lease | 5/31/13 | 6,206 | ||||||||||||||
Batesville, AR | |||||||||||||||||
Broadway Healthcare Center | Triple-net Lease | 5/31/13 | 11,799 | ||||||||||||||
West Memphis, AR | |||||||||||||||||
Jonesboro Healthcare Center | Triple-net Lease | 5/31/13 | 15,232 | ||||||||||||||
Jonesboro, AR | |||||||||||||||||
Magnolia Healthcare Center | Triple-net Lease | 5/31/13 | 11,847 | ||||||||||||||
Magnolia, AR | |||||||||||||||||
Mine Creek Healthcare Center | Triple-net Lease | 5/31/13 | 3,373 | ||||||||||||||
Nashville, AR | |||||||||||||||||
Searcy Healthcare Center | Triple-net Lease | 5/31/13 | 7,898 | ||||||||||||||
Searcy, AR | |||||||||||||||||
Senior Housing | |||||||||||||||||
HarborChase of Jasper | Managed | 8/1/13 | 7,300 | ||||||||||||||
Jasper, AL | |||||||||||||||||
South Bay I Communities | |||||||||||||||||
Raider Ranch | Managed | 8/29/13 | 55,000 | ||||||||||||||
Lubbock, TX | |||||||||||||||||
Town Village | Managed | 8/29/13 | 22,500 | ||||||||||||||
Oklahoma City, OK | |||||||||||||||||
$ | 311,437 | ||||||||||||||||
The following summarizes the purchase price allocation for the above properties, and the estimated fair values of the assets acquired and liabilities assumed (in thousands): | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Land and land improvements | $ | 46,064 | $ | 13,086 | |||||||||||||
Buildings and building improvements | 442,887 | 263,516 | |||||||||||||||
Furniture, fixtures and equipment | 10,014 | 5,135 | |||||||||||||||
Intangibles (1) | 67,431 | 33,138 | |||||||||||||||
Other liabilities | (8,718 | ) | (2,931 | ) | |||||||||||||
Mortgage note payable assumed (2) | (27,657 | ) | — | ||||||||||||||
Net assets acquired | 530,021 | 311,944 | |||||||||||||||
Contingent purchase price consideration | (12,395 | ) | (507 | ) | |||||||||||||
Total purchase price consideration | $ | 517,626 | $ | 311,437 | |||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles for the nine months ended September 30, 2014 and 2013 was approximately 7.1 years and 6.5 years, respectively. The acquired lease intangibles during the nine months ended September 30, 2014 were comprised of approximately $61.4 million and $6.0 million of in-place lease intangibles and other lease intangibles, respectively, and the acquired lease intangibles during the nine months ended September 30, 2013 were comprised of approximately $25.8 million and $7.3 million of in-place lease intangibles and other lease intangibles, respectively. | ||||||||||||||||
-2 | At the acquisition date, the fair value of the mortgage note payable assumed reflects an approximate $0.4 million premium on the above-market mortgage note payable assumed. | ||||||||||||||||
The revenues and net loss (including deductions for acquisition fees and expenses and depreciation and amortization expense) attributable to the acquired properties included in the Company’s condensed consolidated statements of operations were approximately $19.8 million and $4.7 million, respectively, and $36.5 million and $15.3 million, respectively, for the quarter and nine months ended September 30, 2014; and approximately $5.9 million and $2.3 million, respectively, and $6.5 million and $3.9 million, respectively, for the quarter and nine months ended September 30, 2013. | |||||||||||||||||
The following table presents the unaudited pro forma results of operations for the Company as if each of the properties were acquired as of January 1, 2013 and owned during the quarter and nine months ended September 30, 2014 and 2013 (in thousands except per share data): | |||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenues | $ | 50,724 | $ | 36,188 | $ | 146,933 | $ | 105,817 | |||||||||
Net income (loss) (1) | $ | (8,963 | ) | $ | 2,326 | $ | (29,640 | ) | $ | (20,756 | ) | ||||||
Loss per share of common stock (basic and diluted) | $ | (0.10 | ) | $ | 0.04 | $ | (0.33 | ) | $ | (0.39 | ) | ||||||
Weighted average number of shares of common stock outstanding (basic and diluted) (2) | 93,530 | 62,864 | 88,840 | 52,663 | |||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | The unaudited pro forma results for the quarter and nine months ended September 30, 2014, were adjusted to exclude approximately $3.1 million and $13.8 million, respectively, of acquisition related expenses directly attributable to the properties acquired during the quarter and nine months ended September 30, 2014. The unaudited pro forma results for the nine months ended September 30, 2013 were adjusted to include the approximate $13.8 million of acquisition related expenses, as if the properties acquired during the nine months ended September 30, 2014 had been acquired on January 1, 2013. The unaudited pro forma results for the quarter and nine months ended September 30, 2013 were adjusted to exclude approximately $6.3 million and $8.3 million, respectively, of acquisition related expenses directly attributable to the properties acquired during the quarter and nine months ended September 30, 2013. | ||||||||||||||||
-2 | As a result of the acquired properties being treated as operational since January 1, 2013, the Company assumed approximately 18.1 million shares were issued as of January 1, 2013. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2013 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented. | ||||||||||||||||
Real Estate Under Development — In February 2014, the Company acquired a tract of land in Tega Cay, South Carolina for $2.8 million (“Wellmore of Tega Cay”), which is a suburb of Charlotte, North Carolina. In connection with the acquisition, the Company entered into a development agreement with a third party developer for the construction and development of a continuing care retirement community with a maximum development budget of approximately $35.6 million, including the allocated purchase price of the land. The Company determined that Wellmore of Tega Cay is a VIE because it believes there is insufficient equity at risk due to the development nature of the property. The Company is the primary beneficiary while the developer or its affiliates manage the development, construction and certain day-to-day operations of the property subject to the Company’s oversight. Under a promoted interest agreement with the developer, certain net operating income targets have been established which, upon meeting such targets, result in the developer being entitled to additional payments based on enumerated percentages of the assumed net proceeds of a deemed sale, subject to achievement of an established internal rate of return on the Company’s investment in the development. | |||||||||||||||||
In June 2014, the Company entered into a joint venture agreement with a third party and acquired a 95% membership interest in a tract of land in Katy, Texas for $4.0 million (“Watercrest at Katy”), which is a suburb of Houston, Texas. The joint venture plans to construct and develop an independent living community with a maximum development budget of approximately $38.2 million, including the allocated purchase price of the land. The Company determined that Watercrest at Katy is a VIE because it believes there is insufficient equity at risk due to the development nature of the joint venture. The Company is the primary beneficiary and managing member while the joint venture partner or its affiliates manage the development, construction and certain day-to-day operations of the property subject to the Company’s oversight. Refer to Note 13, “Equity – Redeemable Noncontrolling Interest,” for additional information on a put option held by the joint venture partner. Pursuant to the joint venture agreement, distributions of operating cash flow will be distributed pro rata based on each member’s ownership interest until the members of the joint venture receive a specified minimum return on their invested capital, and thereafter, the joint venture partner will receive a disproportionately higher share of any remaining proceeds at varying levels based on the Company having received certain minimum threshold returns. | |||||||||||||||||
In July 2014, the Company acquired a tract of land in Shorewood, Wisconsin for $2.2 million (“HarborChase of Shorewood”), which is a suburb of Milwaukee, Wisconsin. In connection with the acquisition, the Company entered into a development agreement with a third party developer for the construction and development of an assisted living and memory care community with a maximum development budget of approximately $25.6 million, including the allocated purchase price of the land. The Company determined that HarborChase of Shorewood is a VIE because it believes there is insufficient equity at risk due to the development nature of the property. The Company is the primary beneficiary while the developer or its affiliates manage the development, construction and certain day-to-day operations of the property subject to the Company’s oversight. Under a promoted interest agreement with the developer, certain net operating income targets have been established which, upon meeting such targets, result in the developer being entitled to additional payments based on enumerated percentages of the assumed net proceeds of a deemed sale, subject to achievement of an established internal rate of return on the Company’s investment in the development. | |||||||||||||||||
Purchase of Controlling Interest in Montecito Joint Venture — In January 2013, the Company acquired a 90% membership interest in a two-story MOB in Claremont, California for approximately $7.0 million in equity through a joint venture (“Montecito Joint Venture”) formed by the Company and its co-venture partner, an unrelated party, that initially held the remaining 10% interest. The Montecito Joint Venture was previously recorded under the equity method of accounting because the decisions that significantly impacted the entity were shared between the Company and its co-venture partner. | |||||||||||||||||
In August 2014, the Company acquired its co-venture partner’s 10% interest in the Montecito Joint Venture for approximately $1.6 million. As a result of this transaction, the Company owns 100% of the Montecito Joint Venture, and began consolidating all of the assets, liabilities and results of operations in the Company’s consolidated financial statements upon acquisition. Accordingly, the Company recorded a step up from its carrying value of the investment in the Montecito Joint Venture to the estimated fair value of the net assets acquired and liabilities assumed. The following summarizes the allocation of the purchase price, and the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands): | |||||||||||||||||
Land and land improvements | $ | 6,135 | |||||||||||||||
Buildings and building improvements | 13,728 | ||||||||||||||||
Intangibles (1) | 2,677 | ||||||||||||||||
Working capital, net | 87 | ||||||||||||||||
Other liabilities | (167 | ) | |||||||||||||||
Mortgage note payable assumed (2) | (12,331 | ) | |||||||||||||||
Net assets acquired | $ | 10,129 | |||||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 5.1 years and was comprised of approximately $1.9 million and $0.6 million of in-place lease intangibles and other lease intangibles, respectively. | ||||||||||||||||
-2 | At the acquisition date, the fair value of the mortgage note payable assumed reflects an approximate $0.6 million discount on the below-market mortgage note payable assumed. | ||||||||||||||||
The fair value of the Company’s equity interest in the Montecito Joint Venture immediately before the acquisition date was approximately $5.7 million. The Company recorded a gain of approximately $2.8 million based on the acquisition-date fair value of its equity interest in the Montecito Joint Venture. The following summarizes the gain that resulted from the change of control in the equity method investment for the quarter and nine months ended September 30, 2014 (in thousands): | |||||||||||||||||
Fair value of net assets acquired | $ | 10,129 | |||||||||||||||
Less: Previous investment in Montecito Joint Venture | (5,747 | ) | |||||||||||||||
Less: Cash paid to acquire co-venture partner’s interest | (1,584 | ) | |||||||||||||||
Gain on purchase of controlling interest of investment in unconsolidated entity | $ | 2,798 | |||||||||||||||
Refer to Note 8, “Unconsolidated Entities,” for additional information on the Montecito Joint Venture prior to the Company’s purchase of the controlling interest in August 2014. |
Real_Estate_Assets_net
Real Estate Assets, net | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Real Estate Assets, net | ' | ||||||||||
4 | Real Estate Assets, net | ||||||||||
The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||
September 30, | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Land and land improvements | $ | 113,455 | $ | 59,208 | |||||||
Building and building improvements | 1,255,200 | 783,260 | |||||||||
Tenant improvements | 797 | — | |||||||||
Furniture, fixtures and equipment | 33,770 | 20,339 | |||||||||
Less: accumulated depreciation | (41,445 | ) | (14,016 | ) | |||||||
Real estate investment properties, net | 1,361,777 | 848,791 | |||||||||
Real estate under development, including land | 29,720 | 17,409 | |||||||||
Total real estate assets, net | $ | 1,391,497 | $ | 866,200 | |||||||
Depreciation expense on the Company’s real estate investment properties, net was approximately $10.8 million and $27.4 million for the quarter and nine months ended September 30, 2014, respectively, and approximately $3.3 million and $7.2 million for the quarter and nine months ended September 30, 2013, respectively. | |||||||||||
In June 2014, the Company completed the construction and development of a senior housing community in Acworth, Georgia (“Dogwood Forest of Acworth”). Dogwood Forest of Acworth opened to residents beginning in July 2014 and was considered placed into service as of June 30, 2014. As such, the asset values related to Dogwood Forest of Acworth are included in real estate investment properties, net in the accompanying condensed consolidated balance sheet as of September 30, 2014. | |||||||||||
As of September 30, 2014, four of the Company’s senior housing communities have real estate under development with third-party developers as follows (in thousands): | |||||||||||
Property Name (and Location) | Developer | Real Estate | Remaining | ||||||||
Development | Development | ||||||||||
Costs Incurred (1) | Budget (2) | ||||||||||
Raider Ranch | South Bay Partners, Ltd | $ | 3,669 | $ | 12,755 | ||||||
(Lubbock, TX) | |||||||||||
Wellmore of Tega Cay | Maxwell Group, Inc. | 14,104 | 25,050 | ||||||||
(Tega Cay, SC) | |||||||||||
Watercrest at Katy | South Bay Partners, Ltd | 6,131 | 33,311 | ||||||||
(Katy, TX) (3) | |||||||||||
HarborChase of Shorewood | Habor Shorewood Development, LLC | 5,816 | 20,109 | ||||||||
(Shorewood, WI) | |||||||||||
Total | $ | 29,720 | $ | 91,225 | |||||||
FOOTNOTES: | |||||||||||
(1) | This amount represents land and total capitalized costs for GAAP purposes for the acquisition, development and construction of the senior housing community as of September 30, 2014. Amounts include investment services fees, asset management fees, interest expense and other costs capitalized during the development period. | ||||||||||
(2) | This amount includes preleasing and marketing costs which will be expensed as incurred. | ||||||||||
(3) | This property is owned through a joint venture in which the Company’s initial ownership interest is 95%. | ||||||||||
The development budgets of the senior housing developments include the cost of the land, construction costs, development fees, financing costs, start-up costs and initial operating deficits of the respective properties. An affiliate of the developer of the respective community coordinates and supervises the management and administration of the development and construction. Each developer is responsible for any cost overruns beyond the approved development budget for the applicable project pursuant to a cost overrun guarantee. These developments were deemed to be VIEs; refer to Note 7, “Variable Interest Entities,” for additional information. |
Intangibles_net
Intangibles, net | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Intangibles, net | ' | ||||||||||||||||||||||||||||
5 | Intangibles, net | ||||||||||||||||||||||||||||
The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
In-place lease intangibles | $ | 112,887 | $ | 49,642 | |||||||||||||||||||||||||
Above-market lease intangibles | 8,904 | 3,704 | |||||||||||||||||||||||||||
Below-market ground lease intangibles | 5,815 | 4,153 | |||||||||||||||||||||||||||
Less: accumulated amortization | (22,484 | ) | (5,099 | ) | |||||||||||||||||||||||||
Intangible assets, net | $ | 105,122 | $ | 52,400 | |||||||||||||||||||||||||
Below-market lease intangibles | $ | (11,501 | ) | $ | (2,987 | ) | |||||||||||||||||||||||
Above-market ground lease intangibles | (317 | ) | (317 | ) | |||||||||||||||||||||||||
Less: accumulated amortization | 720 | 168 | |||||||||||||||||||||||||||
Intangible liabilities, net (1) | $ | (11,098 | ) | $ | (3,136 | ) | |||||||||||||||||||||||
FOOTNOTE: | |||||||||||||||||||||||||||||
(1) | Intangible liabilities, net are included in other liabilities in the accompanying condensed consolidated balance sheets. | ||||||||||||||||||||||||||||
Amortization on the Company’s intangible assets was approximately $7.1 million and $17.4 million for the quarter and nine months ended September 30, 2014, respectively, of which approximately $0.3 million and $0.7 million, respectively, was treated as a reduction of rental income from operating leases, approximately $0.02 million and $0.1 million, respectively, was treated as an increase of property operating expenses and approximately $6.7 million and $16.7 million, respectively, was included in depreciation and amortization. Amortization on the Company’s intangible assets was approximately $1.3 million and $2.3 million for the quarter and nine months ended September 30, 2013, respectively, of which approximately $0.05 million was treated as a reduction of rental income from operating leases for both the quarter and nine months ended September 30, 2013, approximately $0.01 million was treated as an increase of property operating expenses for both the quarter and nine months ended September 30, 2013 and approximately $1.3 million and $2.3 million, respectively, was included in depreciation and amortization. | |||||||||||||||||||||||||||||
Amortization on the Company’s intangible liabilities was approximately $0.3 million and $0.5 million for the quarter and nine months ended September 30, 2014, of which approximately $0.3 million and $0.5 million, respectively, were treated as an increase of rental income from operating leases and approximately two thousand dollars and six thousand dollars, respectively, was treated as a reduction of property operating expenses. For both the quarter and nine months ended September 30, 2013, amortization on the Company’s intangible liabilities was approximately $0.1 million which was treated as an increase of rental income from operating leases. | |||||||||||||||||||||||||||||
The estimated future amortization on the Company’s intangibles for the remainder of 2014, each of the next four years and thereafter, in the aggregate, as of September 30, 2014 is as follows (in thousands): | |||||||||||||||||||||||||||||
In-place | Above- | Below- | Total Assets | Below- | Above- | Total | |||||||||||||||||||||||
Lease | market | market | market | market | Liabilities | ||||||||||||||||||||||||
Intangibles | Leases | Ground | Leases | Ground | |||||||||||||||||||||||||
Leases | Leases | ||||||||||||||||||||||||||||
2014 | $ | 6,963 | 367 | 37 | $ | 7,367 | $ | (286 | ) | (2 | ) | $ | (288 | ) | |||||||||||||||
2015 | 25,898 | 1,430 | 149 | 27,477 | (1,094 | ) | (8 | ) | (1,102 | ) | |||||||||||||||||||
2016 | 16,768 | 1,192 | 149 | 18,109 | (1,047 | ) | (8 | ) | (1,055 | ) | |||||||||||||||||||
2017 | 6,702 | 1,085 | 149 | 7,936 | (997 | ) | (8 | ) | (1,005 | ) | |||||||||||||||||||
2018 | 6,256 | 999 | 149 | 7,404 | (924 | ) | (8 | ) | (932 | ) | |||||||||||||||||||
Thereafter | 28,761 | 3,003 | 5,065 | 36,829 | (6,442 | ) | (274 | ) | (6,716 | ) | |||||||||||||||||||
$ | 91,348 | 8,076 | 5,698 | $ | 105,122 | $ | (10,790 | ) | (308 | ) | $ | (11,098 | ) | ||||||||||||||||
Weighted average remaining useful life as of September 30, 2014 (in years): | |||||||||||||||||||||||||||||
In-place | Above- | Below- | Below- | Above- | |||||||||||||||||||||||||
Lease | market | market | market | market | |||||||||||||||||||||||||
Intangibles | Leases | Ground | Leases | Ground | |||||||||||||||||||||||||
Leases | Leases | ||||||||||||||||||||||||||||
6.4 | 7.6 | 38.8 | 12.8 | 38.6 | |||||||||||||||||||||||||
Operating_Leases
Operating Leases | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Operating Leases | ' | ||||
6 | Operating Leases | ||||
As of September 30, 2014, the Company owned 43 properties that were leased to tenants on a triple-net, net or modified gross basis, and accounted for as operating leases; of which, 24 are single-tenant properties that are 100% leased under operating leases and the remaining 19 are multi-tenant properties that are leased under operating leases. The Company’s leases had a weighted average remaining lease term of 8.3 years based on annualized base rents expiring between 2014 and 2033, subject to the tenants’ options to extend the lease periods ranging from two to ten years. In addition, certain tenants hold options to extend their leases for multiple periods. | |||||
Under the terms of the Company’s triple-net lease agreements, each tenant is responsible for the payment of property taxes, general liability insurance, utilities, repairs and maintenance, including structural and roof maintenance expenses. Each tenant is expected to pay real estate taxes directly to taxing authorities. However, if the tenant does not pay, the Company will be liable. The total annualized property tax assessed on these properties is approximately $1.9 million. | |||||
Under the terms of the multi-tenant lease agreements that have third-party property managers, each tenant is responsible for the payment of their proportionate share of property taxes, general liability insurance, utilities, repairs and common area maintenance. These amounts are billed monthly and recorded as tenant reimbursement income in the accompanying consolidated statements of operations. | |||||
The following are future minimum lease payments to be received under non-cancellable operating leases for the remainder of 2014, each of the next four years and thereafter, as of September 30, 2014 (in thousands): | |||||
2014 | $ | 13,092 | |||
2015 | 52,335 | ||||
2016 | 51,032 | ||||
2017 | 50,442 | ||||
2018 | 50,093 | ||||
Thereafter | 260,436 | ||||
$ | 477,430 | ||||
The above future minimum lease payments to be received excludes tenant reimbursements, straight-line rent adjustments, amortization of above- and below-market lease intangibles and base rent attributable to any renewal options exercised by the tenants in the future. |
Variable_Interest_Entities
Variable Interest Entities | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Variable Interest Entities | ' | ||||||||
7 | Variable Interest Entities | ||||||||
Consolidated VIEs – As of September 30, 2014, the Company has 12 wholly-owned subsidiaries, which are VIEs due to following factors and circumstances: | |||||||||
-1 | Three of these subsidiaries are single property entities, designed to own and lease their respective properties to single tenants, for which buy-out options are held by the respective tenants that are formula based. | ||||||||
-2 | Three of these subsidiaries are single property entities, designed to own and lease their respective properties to multiple tenants, which are subject to either a ground lease or an air rights lease that include buy-out and put options held by either the tenant or landlord under the applicable lease. | ||||||||
-3 | Five of these subsidiaries are entities with real estate under development or completed developments in which the third-party developers have an opportunity to earn promoted interest payments after certain net operating income targets and internal rate of return targets have been met. | ||||||||
-4 | One of these subsidiaries is a joint venture with real estate under development in which the third-party developer has an opportunity to earn promoted interest payments after certain net operating income targets and internal rate of return targets have been met. | ||||||||
The Company determined it is the primary beneficiary and holds a controlling financial interest in each of the aforementioned property and development entities due to its power to direct the activities that most significantly impact the economic performance of the entities, as well as its obligation to absorb the losses and its right to receive benefits from these entities that could potentially be significant to these entities. As such, the transactions and accounts of these VIEs are included in the accompanying condensed consolidated financial statements. | |||||||||
The aggregate carrying amount and major classifications of the consolidated assets that can be used to settle obligations of the VIEs and liabilities of the consolidated VIEs that are non-recourse to the Company as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Assets: | |||||||||
Real estate investment properties, net | $ | 111,838 | $ | 72,053 | |||||
Real estate under development, including land | $ | 29,720 | $ | 16,210 | |||||
Intangibles, net | $ | 11,166 | $ | 4,535 | |||||
Cash | $ | 7,314 | $ | 727 | |||||
Loan costs, net | $ | 1,869 | $ | 912 | |||||
Other | $ | 1,020 | $ | 382 | |||||
Liabilities: | |||||||||
Mortgages and other notes payable | $ | 84,560 | $ | 52,596 | |||||
Accrued development costs | $ | 4,683 | $ | 7,047 | |||||
Other liabilities | $ | 1,581 | $ | 939 | |||||
Accounts payable and accrued expenses | $ | 829 | $ | 309 | |||||
Due to related parties | $ | 643 | $ | 112 | |||||
The Company’s maximum exposure to loss as a result of its involvement with these VIEs is limited to its net investment in these entities which totaled approximately $70.0 million as of September 30, 2014. The Company’s exposure is limited because of the non-recourse nature of the borrowings of the VIEs. |
Unconsolidated_Entities
Unconsolidated Entities | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Unconsolidated Entities | ' | ||||||||||||||||
8 | Unconsolidated Entities | ||||||||||||||||
The following presents financial information for each of the Company’s unconsolidated entities as of and for the quarter and nine months ended September 30, 2014 (in thousands): | |||||||||||||||||
For the quarter ended September 30, 2014 | |||||||||||||||||
Montecito (2) | CHTSunIV (3) | Windsor | Total | ||||||||||||||
Manor | |||||||||||||||||
Revenues | $ | 328 | $ | — | $ | 2,172 | $ | 2,500 | |||||||||
Operating income | $ | 106 | $ | — | $ | 17 | $ | 123 | |||||||||
Net income (loss) | $ | 37 | $ | — | $ | (208 | ) | $ | (171 | ) | |||||||
Income allocable to other venture partners (1) | $ | 4 | $ | — | $ | (1 | ) | $ | 3 | ||||||||
Income (loss) allocable to the Company (1) | $ | 33 | $ | — | $ | (207 | ) | $ | (174 | ) | |||||||
Amortization of capitalized acquisition costs | (2 | ) | — | (4 | ) | (6 | ) | ||||||||||
Equity in earnings (loss) of unconsolidated entities | $ | 31 | $ | — | $ | (211 | ) | $ | (180 | ) | |||||||
Distributions declared to the Company | $ | 313 | $ | — | $ | 76 | $ | 389 | |||||||||
Distributions received by the Company (4) | $ | 174 | $ | — | $ | 2,493 | $ | 2,667 | |||||||||
For the nine months ended September 30, 2014 | |||||||||||||||||
Montecito (2) | CHTSunIV (3) | Windsor | Total | ||||||||||||||
Manor | |||||||||||||||||
Revenues | $ | 1,356 | $ | — | $ | 6,439 | $ | 7,795 | |||||||||
Operating income | $ | 436 | $ | — | $ | 114 | $ | 550 | |||||||||
Net income (loss) | $ | 165 | $ | — | $ | (950 | ) | $ | (785 | ) | |||||||
Income allocable to other venture partners (1) | $ | 17 | $ | — | $ | 373 | $ | 390 | |||||||||
Income (loss) allocable to the Company (1) | $ | 148 | $ | — | $ | (1,323 | ) | $ | (1,175 | ) | |||||||
Amortization of capitalized acquisition costs | (6 | ) | — | (12 | ) | (18 | ) | ||||||||||
Equity in earnings (loss) of unconsolidated entities | $ | 142 | $ | — | $ | (1,335 | ) | $ | (1,193 | ) | |||||||
Distributions declared to the Company (4) | $ | 659 | $ | — | $ | 2,853 | $ | 3,512 | |||||||||
Distributions received by the Company (4) | $ | 517 | $ | — | $ | 3,157 | $ | 3,674 | |||||||||
FOOTNOTES: | |||||||||||||||||
-1 | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | ||||||||||||||||
-2 | In August 2014, the Company acquired its co-venture partner’s 10% interest in the Montecito joint venture; refer to Note 3, “Acquisitions – Purchase of Controlling Interest in Montecito Joint Venture,” for additional information. | ||||||||||||||||
-3 | In July 2013, the Company completed the sale of its joint venture membership interest in CHTSunIV. | ||||||||||||||||
-4 | The distributions declared to and received by the Company for the Windsor Manor joint venture for the nine months ended September 30, 2014 include approximately $2.2 million of capital proceeds from a debt refinancing; refer to “Off-Balance Sheet Arrangements” for additional information. | ||||||||||||||||
The following presents financial information for each of the Company’s unconsolidated entities as of and for the quarter and nine months ended September 30, 2013 (in thousands): | |||||||||||||||||
For the quarter ended September 30, 2013 | |||||||||||||||||
Montecito (2) | CHTSunIV (3) | Windsor | Total | ||||||||||||||
Manor (2) | |||||||||||||||||
Revenues | $ | 446 | $ | — | $ | 2,043 | $ | 2,489 | |||||||||
Operating income | $ | 121 | $ | — | $ | (24 | ) | $ | 97 | ||||||||
Net income (loss) | $ | 21 | $ | — | $ | (251 | ) | $ | (230 | ) | |||||||
Income (loss) allocable to other venture partners (1) | $ | 2 | $ | — | $ | (524 | ) | $ | (522 | ) | |||||||
Income allocable to the Company (1) | $ | 19 | $ | — | $ | 273 | $ | 292 | |||||||||
Amortization of capitalized acquisition costs | (2 | ) | — | (6 | ) | (8 | ) | ||||||||||
Equity in earnings (loss) of unconsolidated entities | $ | 17 | $ | — | $ | 267 | $ | 284 | |||||||||
Distributions declared to the Company | $ | 357 | $ | — | $ | 107 | $ | 464 | |||||||||
Distributions received by the Company | $ | 342 | $ | 1,503 | $ | — | $ | 1,845 | |||||||||
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Montecito (2) | CHTSunIV (3) | Windsor | Total | ||||||||||||||
Manor (2) | |||||||||||||||||
Revenues | $ | 1,255 | $ | 24,107 | $ | 5,326 | $ | 30,688 | |||||||||
Operating income (loss) (4) | $ | 66 | $ | 3,603 | $ | (18 | ) | $ | 3,651 | ||||||||
Net loss | $ | (218 | ) | $ | (46 | ) | $ | (743 | ) | $ | (1,007 | ) | |||||
Loss allocable to other venture partners (1) | $ | (22 | ) | $ | (1,365 | ) | $ | (1,418 | ) | $ | (2,805 | ) | |||||
Income (loss) allocable to the Company (1) | $ | (196 | ) | $ | 1,319 | $ | 675 | $ | 1,798 | ||||||||
Amortization of capitalized acquisition costs | (6 | ) | (36 | ) | (12 | ) | (54 | ) | |||||||||
Equity in earnings (loss) of unconsolidated entities | $ | (202 | ) | $ | 1,283 | $ | 663 | $ | 1,744 | ||||||||
Distributions declared to the Company | $ | 699 | $ | 2,990 | $ | 287 | $ | 3,976 | |||||||||
Distributions received by the Company | $ | 342 | $ | 4,458 | $ | 224 | $ | 5,024 | |||||||||
FOOTNOTES: | |||||||||||||||||
-1 | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | ||||||||||||||||
-2 | Represents operating results from the date of acquisition through the end of the periods presented. | ||||||||||||||||
-3 | In July 2013, the Company completed the sale of its joint venture membership interest in CHTSunIV. | ||||||||||||||||
-4 | Includes approximately $0.3 million and $0.2 million of non-recurring acquisition expenses incurred by the Montecito and Windsor Manor joint ventures, respectively, for nine months ended September 30, 2013. |
Contingent_Purchase_Price_Cons
Contingent Purchase Price Consideration | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Contingent Purchase Price Consideration | ' | ||||||||||||||||
9 | Contingent Purchase Price Consideration | ||||||||||||||||
Capital Health Communities | |||||||||||||||||
In connection with the acquisition of the Capital Health Communities in 2012, the Company required that approximately $7.0 million of the purchase price be placed in an escrow account as the seller guaranteed the Company an annual return of at least $6.9 million, $7.0 million, and $7.1 million of net operating income on the acquired properties during 2013, 2014 and 2015, respectively (“Yield Guaranty”). As of September 30, 2014, the Company determined the fair value of the Yield Guaranty to be $3.2 million, which was recorded as other assets in the accompanying condensed consolidated balance sheet. The following table provides a roll-forward of the fair value of the contingent purchase price consideration related to the Yield Guaranty on the Capital Health Communities for the quarter and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Beginning balance | $ | 3,509 | $ | 2,664 | $ | 4,488 | $ | 2,664 | |||||||||
Yield Guaranty payment received from seller | (301 | ) | — | (2,601 | ) | — | |||||||||||
Change in fair value | — | — | 1,321 | — | |||||||||||||
Ending balance | $ | 3,208 | $ | 2,664 | $ | 3,208 | $ | 2,664 | |||||||||
South Bay II Communities | |||||||||||||||||
In conjunction with the acquisition of the South Bay II Communities, the Company entered into an agreement with the sellers whereby the purchase price is adjusted in the event that certain net operating income targets are met. The additional consideration was determined within three months of the acquisition date and is equal to (a) the baseline net operating income divided by the baseline capitalization rates (as defined in the purchase and sale agreement) less (b) the purchase price paid at closing. The following table provides a roll-forward of the fair value of the estimated contingent purchase price consideration related to the South Bay II Communities for the quarter and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Beginning balance | $ | (8,500 | ) | $ | — | $ | — | $ | — | ||||||||
Contingent consideration in connection with acquisition | — | — | (12,395 | ) | — | ||||||||||||
Change in fair value | (1,800 | ) | — | (1,800 | ) | — | |||||||||||
Contingent consideration payment | 10,300 | — | 14,195 | — | |||||||||||||
Ending balance | $ | — | $ | — | $ | — | $ | — | |||||||||
Fair Value Measurements | |||||||||||||||||
The fair value of the contingent purchase price consideration was based on a then-current income approach that is primarily determined based on the present value and probability of future cash flows using internal underwriting models. The income approach further includes estimates of risk-adjusted rate of return and capitalization rates for each property. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurements of the estimated fair value related to the Company’s contingent purchase price consideration are categorized as Level 3 on the three-level fair value hierarchy. |
Indebtedness
Indebtedness | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Indebtedness | ' | ||||||||||||
10 | Indebtedness | ||||||||||||
The following table provides details of the Company’s indebtedness as of September 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||
September 30, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Mortgages payable and other notes payable: | |||||||||||||
Fixed rate debt | $ | 373,219 | $ | 290,817 | |||||||||
Variable rate debt (1) | 326,623 | 147,290 | |||||||||||
Mortgages and other notes payable | 699,842 | 438,107 | |||||||||||
Premium (discount), net (2) | (251 | ) | — | ||||||||||
Mortgages and other notes payable, net | 699,591 | 438,107 | |||||||||||
Revolving credit facility | 180,615 | 98,500 | |||||||||||
Total borrowings | $ | 880,206 | $ | 536,607 | |||||||||
FOOTNOTES: | |||||||||||||
-1 | As of September 30, 2014 and December 31, 2013, the Company had entered into forward-starting interest rate swaps for total notional amounts of approximately $269.4 million and $124.3 million, respectively, in order to hedge its exposure to this variable rate debt in future periods. The forward-starting interest rate swaps have a range of effective dates beginning in 2015 and continuing through the maturity date of the respective loan (ranging from 2016 through 2019). Refer to Note 12, “Derivative Financial Instruments,” for additional information. | ||||||||||||
-2 | Premium (discount), net is reflective of the Company recording mortgage note payables assumed at fair value on the respective acquisition date. | ||||||||||||
Maturities of indebtedness for the remainder of 2014 and each of the next four years and thereafter, in the aggregate, as of September 30, 2014 are as follows (in thousands): | |||||||||||||
2014 | $ | 3,020 | |||||||||||
2015 | 14,587 | ||||||||||||
2016 | 276,550 | ||||||||||||
2017 | 30,081 | ||||||||||||
2018 | 288,403 | ||||||||||||
Thereafter | 267,565 | ||||||||||||
$ | 880,206 | ||||||||||||
The Company financed a portion of the acquisitions described in Note 3, “Acquisitions,” through additional borrowings and loan assumptions. The following table provides details as of September 30, 2014 (in thousands): | |||||||||||||
Property and Loan Type | Interest Rate at | Payment Terms | Maturity | September 30, | |||||||||
September 30, 2014 (1) | Date (2) | 2014 | |||||||||||
Pacific Northwest II Communities; Mortgage Loan | 4.30% | Monthly principal and interest payments based on a 30-year amortization schedule | 12/5/18 | $ | 62,309 | ||||||||
per annum | |||||||||||||
Isle at Watercrest – | 4.68% | Monthly principal and interest payments based on a total payment of $143,330 | 6/1/23 | 27,181 | |||||||||
Mansfield; Mortgage Loan (3) | per annum | ||||||||||||
Total fixed rate debt | 89,490 | ||||||||||||
Wellmore of Tega Cay; | 30-day LIBOR | Monthly interest only payments through February 2019; principal and interest payments thereafter based on 25-year amortization schedule | 2/6/19 | 1,229 | |||||||||
Construction Loan | (with floor | ||||||||||||
of 0.50%) plus | |||||||||||||
5.4% per annum | |||||||||||||
Houston Orthopedic & Spine Hospital and Medical Building; | 90-day LIBOR | Monthly principal and interest payments based on a 30-year amortization schedule | 6/1/19 | 49,814 | |||||||||
Mortgage Loan | plus 2.85% per | ||||||||||||
annum | |||||||||||||
Medical Portfolio II Properties; | 90-day LIBOR | Monthly principal and interest payments based on 25-year amortization schedule | 7/14/19 | 85,445 | |||||||||
Mortgage Loan | (with 0.25% | ||||||||||||
floor) plus 2.35% | |||||||||||||
per annum | |||||||||||||
Claremont Medical Office; | 30-day LIBOR | Monthly principal and interest payments based upon a 30-year amortization schedule | 1/15/18 | 12,958 | |||||||||
Mortgage Loan (4) | plus 2.6% | ||||||||||||
per annum | |||||||||||||
Lee Hughes Medical Building; | 30-day LIBOR | Monthly principal and interest payments based upon a 30-year amortization schedule | 9/5/16 | 19,250 | |||||||||
Mortgage Loan | plus 1.85% | ||||||||||||
per annum | |||||||||||||
Total variable rate debt | 168,696 | ||||||||||||
Fixed and variable rate debt | 258,186 | ||||||||||||
Premium (discount), net | (251 | ) | |||||||||||
Total debt | $ | 257,935 | |||||||||||
FOOTNOTES: | |||||||||||||
(1) | The 30-day LIBOR and 90-day LIBOR were approximately 0.16% and 0.24%, respectively, as September 30, 2014. | ||||||||||||
(2) | Represents the initial maturity date (or, as applicable, the maturity date as extended). The maturity date may be extended beyond the date shown subject to certain lender conditions. | ||||||||||||
(3) | The balance for this loan excludes a premium of $0.4 million related to the mortgage note payable assumed being recorded at fair value on the acquisition date. | ||||||||||||
(4) | The balance for this loan excludes a discount of $0.6 million related to the mortgage note payable assumed being recorded at fair value on the acquisition date. | ||||||||||||
In February 2014, through its limited partnership, the Company modified the terms of its Revolving Credit Facility and exercised its option to increase the aggregate maximum principal amount available for borrowing from $120 million to $240 million. In April, the Company increased the aggregate maximum principal amount available to $275 million. The Company borrowed approximately $112.1 million of on its Revolving Credit Facility during the nine months ended September 30, 2014 to finance acquisitions (primarily the South Bay II Communities). As of September 30, 2014, the Revolving Credit Facility had an outstanding balance of approximately $180.6 million and was collateralized by 15 properties with an aggregate net book carrying value of approximately $266.2 million. The Revolving Credit Facility has sizing requirements that govern the total amount that the Company may borrow at any given time based on the purchase price of the collateral and a metric of debt service coverage. | |||||||||||||
The Company’s Revolving Credit Facility contains affirmative, negative, and financial covenants which are customary for loans of this type, including without limitation: (i) limitations on incurrence of additional indebtedness; (ii) restrictions on payments of cash distributions except if required by REIT requirements; (iii) minimum occupancy levels for collateralized properties; (iv) minimum loan-to-value and debt service coverage ratios with respect to collateralized properties; (v) maximum leverage, secured recourse debt, and unimproved land/development property ratios; (vi) minimum fixed charge coverage ratio and minimum consolidated net worth, unencumbered liquidity, and equity raise requirements; (vii) limitations on certain types of investments and additional indebtedness; and (viii) minimum liquidity. The limitations on distributions includes a limitation on the extent of allowable distributions, which are not to exceed the greater of 95% of adjusted FFO (as defined per the loan agreement) or the minimum amount of distributions required to maintain the Company’s REIT status. As of September 30, 2014, the Company was in compliance with all affirmative, negative and financial covenants. | |||||||||||||
All of the Company’s mortgage and construction loans contain customary financial covenants and ratios; including (but not limited to) the following: debt service coverage ratio, minimum occupancy levels, limitations on incurrence of additional indebtedness, etc. As of September 30, 2014, the Company was in compliance with all financial covenants and ratios. | |||||||||||||
The fair market value and carrying value of the mortgage and other notes payable was approximately $689.2 million and $669.8 million, respectively, and both the fair market value and carrying value of the Revolving Credit Facility was $180.6 million as of September 30, 2014. The fair market value and carrying value of the mortgage and other notes payable was approximately $431.4 million and $438.1 million, respectively, and both the fair market value and carrying value of the Revolving Credit Facility was $98.5 million as of December 31, 2013. These fair market values are based on current rates and spreads the Company would expect to obtain for similar borrowings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to the Company’s mortgage notes payable is categorized as level 3 on the three-level valuation hierarchy. The estimated fair value of accounts payable and accrued expenses approximates the carrying value as of September 30, 2014 and December 31, 2013 because of the relatively short maturities of the obligations. |
Related_Party_Arrangements
Related Party Arrangements | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Related Party Arrangements | ' | ||||||||||||||||||||||||
11 | Related Party Arrangements | ||||||||||||||||||||||||
The Company incurs operating expenses which, in general, relate to administration of the Company on an ongoing basis. Pursuant to the advisory agreement, the Advisor shall reimburse the Company the amount by which the total operating expenses paid or incurred by the Company exceed, in any four consecutive fiscal quarters (an “Expense Year”) commencing with the Expense Year ending June 30, 2013, the greater of 2% of average invested assets or 25% of net income (as defined in the advisory agreement) (the “Limitation”), unless a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors (the “Expense Cap Test”). In performing the Expense Cap Test, the Company uses operating expenses on a GAAP basis after making adjustments for the benefit of expense support under the Expense Support Agreements. For the Expense Year ended September 30, 2014, the Company did not incur operating expenses in excess of the Limitation. | |||||||||||||||||||||||||
The Company maintains accounts totaling approximately $0.1 million and $0.4 million as of September 30, 2014 and December 31, 2013, respectively, at a bank in which the Company’s chairman serves as a director. | |||||||||||||||||||||||||
In March 2013, the Company entered into the Advisor Expense Support Agreement, whereby commencing on April 1, 2013, the Advisor has agreed to provide expense support to the Company through forgoing the payment of fees in cash and acceptance of restricted stock for services rendered and specified expenses incurred in an amount equal to the positive excess, if any, of (a) aggregate stockholder cash distributions declared for the applicable quarter, over (b) the Company’s aggregate modified funds from operations (as defined in the Advisor Expense Support Agreement). The Advisor expense support amount is determined for each calendar quarter of the Company, on a non-cumulative basis, each quarter-end date (“Determination Date”). In August 2013, the Company entered into the Property Manager Expense Support Agreement, whereby commencing on July 1, 2013, the Property Manager agreed to provide expense support to the Company through forgoing the payment of fees in cash and accepting restricted stock for services in an amount equal to the positive excess, if any, of (a) aggregate stockholder cash distributions declared for the applicable quarter, over (b) the Company’s aggregate modified funds from operations (as defined in the Property Manager Expense Support Agreement). The Property Manager expense support amount shall be determined, on a non-cumulative basis, after the calculation of the Advisor expense support amount pursuant to the Property Manager Expense Support Agreement on each Determination Date. The terms of both the Advisor Expense Support Agreement and the Property Manager Expense Support Agreement (‘the Expense Support Agreements”) run through December 31, 2014 and automatically renews for successive one-year periods thereafter, subject to the right of the Advisor or Property Manager to terminate their respective agreements upon 30 days’ written notice to the Company. | |||||||||||||||||||||||||
In exchange for services rendered and in consideration of the expense support provided, the Company will issue, within 45 days following each Determination Date, a number of shares of restricted stock equal to the quotient of the expense support amount provided by to the Advisor and Property Manager for the preceding quarter divided by the then-current public offering price per share of common stock, on the terms and conditions and subject to the restrictions set forth in the respective expense support agreements (“Expense Support Agreements”). Any amounts foregone, and for which restricted stock shares are issued, pursuant to the Expense Support Agreements will be permanently waived and the Company will have no obligation to pay such amounts to the Advisor or the Property Manager. The Restricted Stock is subordinated and forfeited to the extent that stockholders do not receive their original invested capital back with at least a 6% annualized return of investment upon ultimate liquidity of the Company. Since the vesting criteria is outside the control of the Advisor and Property Manager and involves both market conditions and counterparty performance conditions, the restricted stock shares will be treated as unissued for financial reporting purposes until the vesting criteria, as defined in the Expense Support Agreements, are met. | |||||||||||||||||||||||||
The fees incurred by and reimbursable to the Advisor in connection with the Company’s Offering for the quarters and nine months ended September 30, 2014 and 2013, and related amounts unpaid as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||
Quarter ended | Nine Months Ended | Unpaid amounts as of (1) | |||||||||||||||||||||||
September 30, | September 30, | September 30, | December 31, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Selling commissions (2) | $ | 6,689 | $ | 3,247 | $ | 12,285 | $ | 7,165 | $ | 170 | $ | 71 | |||||||||||||
Marketing support fees (2) | 4,524 | 3,252 | 9,937 | 8,463 | 135 | 70 | |||||||||||||||||||
$ | 11,213 | $ | 6,499 | $ | 22,222 | $ | 15,628 | $ | 305 | $ | 141 | ||||||||||||||
The expenses and fees incurred by and reimbursable to the Company’s related parties for the quarters and nine months ended September 30, 2014 and 2013, and related amounts unpaid as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||
Quarter ended | Nine Months Ended | Unpaid amounts as of (1) | |||||||||||||||||||||||
September 30, | September 30, | September 30, | December 31, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Reimbursable expenses: | |||||||||||||||||||||||||
Offering costs (2) | $ | 1,075 | $ | 692 | $ | 3,442 | $ | 2,714 | $ | 345 | $ | 612 | |||||||||||||
Operating expenses (3) | 918 | 667 | 2,402 | 1,776 | 594 | 915 | |||||||||||||||||||
Acquisition fees and expenses | 130 | 97 | 463 | 336 | — | 138 | |||||||||||||||||||
2,123 | 1,456 | 6,307 | 4,826 | 939 | 1,665 | ||||||||||||||||||||
Investment services fees (4) | 3,651 | 4,584 | 11,875 | 6,450 | 523 | — | |||||||||||||||||||
Disposition fee (5) | — | 608 | — | 608 | — | — | |||||||||||||||||||
Financing coordination fees (6) | — | — | 220 | — | — | — | |||||||||||||||||||
Property management fees (7) | 728 | 295 | 1,763 | 879 | 459 | 322 | |||||||||||||||||||
Asset management fees (8) | 3,696 | 1,264 | 9,510 | 2,898 | 420 | 894 | |||||||||||||||||||
Interest reserve and other advances (9) | — | — | — | — | 8 | 286 | |||||||||||||||||||
$ | 10,198 | $ | 8,207 | $ | 29,675 | $ | 15,661 | $ | 2,349 | $ | 3,167 | ||||||||||||||
FOOTNOTES: | |||||||||||||||||||||||||
(1) | Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. | ||||||||||||||||||||||||
(2) | Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders’ equity and redeemable noncontrolling interest. | ||||||||||||||||||||||||
(3) | Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||
(4) | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $3.7 million and $11.9 million, respectively, in investment services fees of which approximately $0.4 million and $1.6 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $4.6 million and $6.4 million, respectively, in investment service fees, of which approximately $0.5 million, was capitalized as part of its investment in the Montecito Joint Venture and the additional Windsor Manor II Communities, and included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet. Investment service fees, that are not capitalized, are recorded as acquisition fees and expenses in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||
(5) | Amounts are recorded as a reduction to gain on sale of investment in unconsolidated entity in the accompanying consolidated statements of operations. | ||||||||||||||||||||||||
(6) | For the nine months ended September 30, 2014, the Company incurred approximately $0.2 million in financing coordination fees, which was capitalized and included in its investment in the Windsor Manor Joint Venture. There were no financing coordination fees for the quarter and nine months ended September 30, 2013. | ||||||||||||||||||||||||
(7) | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $0.7 million and $1.8 million, respectively, in property and construction management fees payable to the Property Manager of which approximately $0.2 million and $0.3 million, respectively, in construction management fees were capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $0.3 million and $0.9 million, respectively, in property and construction management fees payable to the Property Manager of which $0.07 million and $0.2 million, respectively, was capitalized and included in real estate under development. | ||||||||||||||||||||||||
(8) | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $3.7 million and $9.5 million, respectively, in asset management fees payable to the Advisor of which approximately $0.9 million and $3.8 million, respectively, was forgone in accordance with the terms of the Advisor Expense Support Agreement and approximately $0.1 million and $0.2 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $1.3 million and $3.4 million, respectively, in asset management fees payable to the Advisor of which approximately $0.5 million for the nine months ended September 30, 2013 was forgone in accordance with the terms of the Expense Support Agreement and approximately $0.2 million and $0.2 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. | ||||||||||||||||||||||||
(9) | Amounts primarily consists of an interest reserve account related to the acquisition, development and construction loan (“ADC Loan”) that the Company originated in June 2013. | ||||||||||||||||||||||||
The following fees were foregone in connection with the Expense Support Agreements for the quarter and nine months ended September 30, 2014 and 2013, and cumulatively as of September 30, 2014 (in thousands, except offering price): | |||||||||||||||||||||||||
Quarter ended | Nine Months Ended | As of | |||||||||||||||||||||||
September 30, | September 30, | September 30, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | |||||||||||||||||||||
Asset management fees (1) | $ | 884 | $ | — | $ | 3,764 | $ | 474 | $ | 5,166 | |||||||||||||||
Then-current offering price | $ | 10.14 | $ | 10 | $ | 10.14 | $ | 10 | $ | 10.14 | |||||||||||||||
Restricted stock shares (2) | 87 | — | 371 | 47 | 510 | ||||||||||||||||||||
Cash distributions on Restricted Stock (3) | $ | 30 | $ | — | $ | 48 | $ | — | $ | 53 | |||||||||||||||
Stock distributions on Restricted Stock (4) | 2 | — | 4 | — | 4 | ||||||||||||||||||||
FOOTNOTES: | |||||||||||||||||||||||||
(1) | No other amounts have been forgone in connection with the Expense Support Agreements for the quarter and nine months ended September 30, 2014 and 2013, and cumulatively as of September 30, 2014. | ||||||||||||||||||||||||
(2) | Restricted stock shares are comprised of approximately 0.42 million issued to the Advisor and approximately 0.09 million issuable to the Advisor as of September 30, 2014. Since the vesting conditions were not met through September 30, 2014, no fair value was assigned to the restricted stock shares as the shares were valued at zero, which represents the lowest possible value estimated at vesting. In addition, the restricted stock shares were treated as unissued for financial reporting purposes because the vesting criteria had not been met through September 30, 2014. | ||||||||||||||||||||||||
(3) | The cash distributions have been recognized as compensation expense as issued and included in general and administrative expense in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||
(4) | The par value of the stock distributions has been recognized as compensation expense as issued and included in general and administrative expense in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||
As of September 30, 2014, the Company’s ADC Loan of approximately $6.0 million to C4 Development, LLC, a related party, for the development of an MOB in Rutland, Virginia had been fully repaid. The previous funding on the ADC Loan was recorded as a note receivable from related party in the accompanying condensed consolidated balance sheet as of December 31, 2013. In addition, the Company recorded interest income for both the quarter and nine months ended September 30, 2014 and 2013, which is included in interest income on note receivable from related party in the accompanying condensed consolidated statements of operations for the respective periods. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Derivative Financial Instruments | ' | ||||||||||||||||||||||||||||
12 | Derivative Financial Instruments | ||||||||||||||||||||||||||||
The following table summarizes the terms of the derivative financial instruments held by the Company or through its joint venture and the asset (liability) that has been recorded (in thousands): | |||||||||||||||||||||||||||||
Fair value | |||||||||||||||||||||||||||||
asset (liability) as of | |||||||||||||||||||||||||||||
Notional | Strike (1) | Credit | Trade | Forward | Maturity | September 30, | December 31, | ||||||||||||||||||||||
Amount | Spread (1) | date | date | date | 2014 | 2013 | |||||||||||||||||||||||
$12,421(2) | 1.3 | % | 2.6 | % | 1/17/13 | 1/15/15 | 1/16/18 | $ | 7 | $ | 115 | ||||||||||||||||||
$38,255(2) | 2.7 | % | 2.5 | % | 9/6/13 | 8/17/15 | 7/10/18 | $ | (928 | ) | $ | (590 | ) | ||||||||||||||||
$26,067(2) | 2.8 | % | 2.5 | % | 9/6/13 | 8/17/15 | 8/29/18 | $ | (689 | ) | $ | (435 | ) | ||||||||||||||||
$30,000(2) | 1.1 | % | 2.7 | % | 10/22/13 | 8/5/15 | 8/19/16 | $ | (35 | ) | $ | (10 | ) | ||||||||||||||||
$29,952(2) | 0.9 | % | 4.3 | % | 11/13/13 | 5/11/15 | 5/31/16 | $ | (31 | ) | $ | (8 | ) | ||||||||||||||||
$11,000(3) | 3 | % | — | % | 6/27/14 | 6/30/14 | 6/30/17 | $ | 21 | $ | — | ||||||||||||||||||
$48,415(2) | 2.4 | % | 2.9 | % | 8/15/14 | 6/1/16 | 6/2/19 | $ | 206 | $ | — | ||||||||||||||||||
$84,251(2) | 2.3 | % | 2.4 | % | 9/12/14 | 8/1/15 | 7/15/19 | $ | (330 | ) | $ | — | |||||||||||||||||
FOOTNOTES: | |||||||||||||||||||||||||||||
(1) | The all-in rates for each derivative financial instrument are equal to the sum of the Strike and Credit Spread detailed above. | ||||||||||||||||||||||||||||
(2) | Amounts related to interest rate swaps held by the Company or its subsidiaries, which are recorded at fair value and included in either other assets or other liabilities in the accompanying condensed consolidated balance sheets. | ||||||||||||||||||||||||||||
(3) | Amounts related to the interest rate cap held by the Windsor Manor Joint Venture for which the proportionate amounts of fair value relative to the Company’s ownership percentage are included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheets. | ||||||||||||||||||||||||||||
Although the Company has determined that the majority of the inputs used to value its derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative financial instruments and has determined that the credit valuation adjustments on the overall valuation adjustments are not significant to the overall valuation of its derivative financial instruments. As a result, the Company determined that its derivative financial instruments valuation in its entirety is classified in Level 2 of the fair value hierarchy. Determining fair value requires management to make certain estimates and judgments. Changes in assumptions could have a positive or negative impact on the estimated fair values of such instruments which could, in turn, impact the Company’s or its joint venture’s results of operations. |
Equity
Equity | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Equity | ' | ||||||||||||||||||
13 | Equity | ||||||||||||||||||
Redeemable Noncontrolling Interest: | |||||||||||||||||||
In connection with the Watercrest at Katy joint venture described in Note 3, “Acquisitions – Real Estate Under Development,” the Company’s joint venture partner acquired a 5% noncontrolling interest that includes a put option of its membership to the Company at any time commencing on the date on which Watercrest at Katy development opens to residents and concluding on the fifth anniversary thereof, when net operating income (“NOI”) is: (a) equal to or greater than the NOI threshold established in the joint venture agreement, and (b) has been equal to or greater than the NOI threshold established in the joint venture agreement for the three calendar months immediately preceding the calendar month during which the joint venture partner exercises the put option. The put option is redeemable for cash at a price equal to the appraised market value (less certain transaction-related costs) at the time the put option is exercised (“Put Price”). The Company’s maximum exposure, as a result of these redeemable equity securities, is limited to the Put Price multiplied by the joint venture partner’s 5% membership interest. | |||||||||||||||||||
Stockholders’ Equity: | |||||||||||||||||||
Public Offering — As of September 30, 2014 and December 31, 2013, the Company had received aggregate offering proceeds of approximately $914.8 million (91.2 million shares) and $568.9 million (57.0 million shares), respectively, including approximately $21.3 million (2.2 million shares) and $9.4 million (1.0 million shares), respectively, received through its Reinvestment Plan. | |||||||||||||||||||
Distributions — During the nine months ended September 30, 2014 and 2013, the Company declared cash distributions of approximately $21.7 million and $9.0 million, respectively. In addition, the Company declared and made stock distributions of 1.6 million shares and 0.7 million shares of common stock, respectively, for the nine months ended September 30, 2014 and 2013, which are reflected for the purposes of earnings per share as being outstanding since the beginning of the earliest period presented. | |||||||||||||||||||
For the nine months ended September 30, 2014, 21.5% of distributions paid to stockholders were considered taxable as ordinary income and 78.5% were considered a return of capital for federal income tax purposes. For the nine months ended September 30, 2013, 100.0% of distributions paid to stockholders were considered capital gain for federal income tax purposes as a result of the gain on the sale of our unconsolidated senior housing joint venture. No amounts distributed to stockholders for the nine months ended September 30, 2014 and 2013 were required to be or have been treated by the Company as a return of capital for purposes of calculating the stockholders’ return on their invested capital as described in the Company’s advisory agreement. The distribution of new common shares to recipients is non-taxable. | |||||||||||||||||||
Refer to Note 11, “Related Party Arrangements,” for information on distributions paid to the Advisor in connection with restricted stock shares received under the Advisor Expense Support Agreement. | |||||||||||||||||||
Redemptions — During the nine months ended September 30, 2014 and 2013, the Company received requests for the redemption of common stock of an aggregate of 0.2 million shares and 0.08 million shares, respectively, all of which were approved for redemption at an average price of $9.13 and $9.27, respectively, and for a total of approximately $2.1 million and $0.7 million, respectively. | |||||||||||||||||||
Other comprehensive income (loss) — The following table reflects the effect of derivative financial instruments held by Company, or its equity method investments, and included in the condensed consolidated statements of comprehensive loss for the quarter and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||||
Derivative Financial | Gain (loss) recognized in | Location of | Gain (loss) reclassified | ||||||||||||||||
Instrument | other comprehensive loss | gain (loss) | from AOCI into earnings | ||||||||||||||||
on derivative financial | reclassified | (Effective Portion) | |||||||||||||||||
instrument | into earnings | ||||||||||||||||||
(Effective Portion) | (Effective | ||||||||||||||||||
Portion) | |||||||||||||||||||
Quarter Ended | Quarter Ended September 30, | ||||||||||||||||||
September 30, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Interest rate swaps | $ | 224 | $ | (1,230 | ) | Not applicable | $ | — | $ | — | |||||||||
Interest rate cap held by unconsolidated joint venture | (2 | ) | — | Not applicable | — | — | |||||||||||||
Interest rate swap held by unconsolidated joint venture | — | (69 | ) | Not applicable | — | — | |||||||||||||
Total | $ | 222 | $ | (1,299 | ) | $ | — | $ | — | ||||||||||
Derivative Financial | Gain (loss) recognized in | Location of | Gain (loss) reclassified | ||||||||||||||||
Instrument | other comprehensive loss | gain (loss) | from AOCI into earnings | ||||||||||||||||
on derivative financial | reclassified | (Effective Portion) | |||||||||||||||||
instrument | into earnings | ||||||||||||||||||
(Effective Portion) | (Effective | ||||||||||||||||||
Portion) | |||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Interest rate swaps | $ | (872 | ) | $ | (1,230 | ) | Not applicable | $ | — | $ | — | ||||||||
Interest rate cap held by unconsolidated joint venture | 21 | — | Not applicable | — | — | ||||||||||||||
Interest rate swap held by unconsolidated joint venture | — | 62 | Not applicable | — | — | ||||||||||||||
Total | $ | (851 | ) | $ | (1,168 | ) | $ | — | $ | — | |||||||||
Income_Taxes
Income Taxes | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
14 | Income Taxes | ||||||||||||||||
The components of the income tax benefit (expense) for the quarter and nine months ended September 30, 2014 are as follows (in thousands): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Current: | |||||||||||||||||
Federal | $ | — | $ | — | $ | — | $ | 13 | |||||||||
State | (37 | ) | — | (9 | ) | — | |||||||||||
Total current benefit (expense) | (37 | ) | — | (9 | ) | 13 | |||||||||||
Deferred: | |||||||||||||||||
Federal | — | — | — | (25 | ) | ||||||||||||
State | — | — | — | (6 | ) | ||||||||||||
Total deferred expense | — | — | — | (31 | ) | ||||||||||||
Income tax benefit (expense) | $ | (37 | ) | $ | — | $ | (9 | ) | $ | (18 | ) | ||||||
Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of September 30, 2014 are as follows: | |||||||||||||||||
Carryforwards of net operating loss | $ | 1,787 | |||||||||||||||
Prepaid rent | 337 | ||||||||||||||||
Valuation allowance | (2,124 | ) | |||||||||||||||
Net deferred tax assets | $ | — | |||||||||||||||
A reconciliation of the income tax benefit (expense) computed at the statutory federal tax rate on income before income taxes is as follows (in thousands): | |||||||||||||||||
Quarter Ended September 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Tax expense computed at federal statutory rate | $ | (4,259 | ) | (35.00 | )% | $ | (806 | ) | (35.00 | )% | |||||||
Benefit of REIT election | 4,259 | 35 | % | 806 | 35 | % | |||||||||||
State income tax expense | (37 | ) | (0.30 | )% | — | — | % | ||||||||||
Income tax expense | $ | (37 | ) | (0.30 | )% | $ | — | — | % | ||||||||
Nine Months Ended September 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Tax expense computed at federal statutory rate | $ | (12,957 | ) | (35.00 | )% | $ | (3,130 | ) | (35.00 | )% | |||||||
Benefit of REIT election | 12,957 | 35 | % | 3,118 | 34.86 | % | |||||||||||
State income tax expense | (9 | ) | (0.02 | )% | (6 | ) | (0.07 | )% | |||||||||
Income tax expense | $ | (9 | ) | (0.02 | )% | $ | (18 | ) | (0.21 | )% | |||||||
The tax years 2010 through 2013 remain subject to examination by taxing authorities throughout the United States. The Company analyzed its material tax positions and determined that it has not taken any uncertain tax positions. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |
Sep. 30, 2014 | ||
Commitments and Contingencies | ' | |
15 | Commitments and Contingencies | |
From time to time the Company may be exposed to litigation arising from operations of its business in the ordinary course of business. Management is not aware of any litigation that it believes will have a material adverse impact on the Company’s financial condition or results of operations. | ||
Refer to Note 4, “Real Estate Assets, net,” for additional information on the remaining development budgets for the Company’s senior housing developments. |
Ground_and_Air_Rights_Leases
Ground and Air Rights Leases | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Ground and Air Rights Leases | ' | ||||
16 | Ground and Air Rights Leases | ||||
During the nine months ended September 30, 2014 in conjunction with the Glendale MOB detailed in Note 3. “Acquisitions,” the Company acquired interests in a ground lease. The Glendale MOB’s ground lease represents an operating lease with scheduled payments over the life of the respective lease expiring in 2053. | |||||
Overall, under the terms of its ground and air rights lease agreements, the Company is responsible for the monthly rental payments. These amounts are billed monthly and recorded as property operating expenses in the accompanying consolidated statements of operations. In some cases, the Company is able to pass this expense through to its tenants as tenant reimbursement income. The Company incurred approximately $0.04 million and $0.1 in ground and air rights lease expense for the quarter and nine months ended September 30, 2014, respectively. For both the quarter and nine months ended September 30, 2013, the Company incurred $0.03 million in ground and air rights lease expense. | |||||
The following is a schedule of future minimum lease payments to be paid under the ground and air rights leases for the remainder of 2014, each of the next four years and thereafter, in the aggregate, as of September 30, 2014 (in thousands): | |||||
2014 | $ | 54 | |||
2015 | 217 | ||||
2016 | 220 | ||||
2017 | 223 | ||||
2018 | 227 | ||||
Thereafter | 21,846 | ||||
$ | 22,787 | ||||
Subsequent_Events
Subsequent Events | 9 Months Ended | |
Sep. 30, 2014 | ||
Subsequent Events | ' | |
17 | Subsequent Events | |
During the period from October 1, 2014 through November 3, 2014, the Company received additional subscription proceeds of approximately $63.1 million (6.2 million shares). | ||
The Company’s board of directors declared a monthly cash distribution of $0.0338 and a monthly stock distribution of 0.0025 shares on each outstanding share of common stock on October 1, 2014 and November 1, 2014. These distributions are to be paid and distributed by December 31, 2014. | ||
In November 2014, the Company announced that, effective November 4, 2014, its shares will be offered at $10.58 per share, or $10.06 per share pursuant to the Reinvestment Plan. In connection therewith, the Company’s board of directors increased the amount of monthly cash distributions to $0.0353 per share together with monthly stock distributions remaining at 0.0025 shares of common stock payable to all common stockholders of record as of the close of business on the first business day of each month beginning December 1, 2014. This change allows the Company to maintain its historical annual distribution rate of 4.0% in cash (based on the revised $10.58 offering price) and 3 shares (or 3%) on each 100 outstanding shares of common stock. The new distribution rates are payable to all common stockholders of record as of the close of business of the first day of each month beginning December 1, 2014. | ||
In November 2014, the Company filed an amendment in which it increased the size of the follow-on offering from $750 million to $1 billion. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Basis of Presentation and Consolidation | ' |
Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter or nine months ended September 30, 2014 may not be indicative of the results that may be expected for the year ending December 31, 2014. Amounts as of December 31, 2013 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |
The accompanying unaudited condensed consolidated financial statements include the Company’s accounts and the accounts of its wholly owned subsidiaries or subsidiaries for which the Company has a controlling financial interest, including the accounts of variable interest entities (“VIEs”) in which the Company is the primary beneficiary. All material intercompany accounts and transactions have been eliminated in consolidation. | |
In accordance with the guidance for the consolidation of VIEs, the Company analyzes its variable interests, including loans, leases, guarantees, and equity investments, to determine if the entity in which it has a variable interest is a variable interest entity (“VIE”). The Company’s analysis includes both quantitative and qualitative reviews. The Company bases its quantitative analysis on the forecasted cash flows of the entity, and its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and financial agreements. The Company also uses its quantitative and qualitative analyses to determine if it is the primary beneficiary of the VIE, and if such determination is made, it includes the accounts of the VIE in its consolidated financial statements. | |
Use of Estimates | ' |
Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods and the disclosure of contingent liabilities. For example, significant assumptions are made in the allocation of purchase price, the analysis of real estate impairments, the valuation of contingent assets and liabilities, and the valuation of restricted stock shares issued. Accordingly, actual results could differ from those estimates. | |
Redeemable Noncontrolling Interest | ' |
Redeemable Noncontrolling Interest – The Company entered into a joint venture agreement with a third party and acquired a 95% membership interest. The Company’s joint venture partner acquired a 5% noncontrolling interest that includes a put option of its membership to the Company upon the occurrence of certain events that are not solely within the control of the Company and at price that is determinable upon exercising the option. The Company classifies redeemable equity securities in accordance with Accounting Standard Update (“ASU”) No. 2009-04, “Liabilities (Topic 480): Accounting for Redeemable Equity Instruments,” which requires that equity securities redeemable at the option of the holder be classified outside of permanent stockholders’ equity. Accordingly, the Company has classified these redeemable equity securities as redeemable noncontrolling interest within the accompanying condensed consolidated balance sheets and condensed consolidated statements of stockholders’ equity and redeemable noncontrolling interest. | |
Promoted Interest Distributions | ' |
Promoted Interest Distributions – The Company accounts for distributions to holders of promoted interests in a manner similar to noncontrolling interests. The Company identifies the distributions to holders of promoted interests separately within the accompanying condensed consolidated statements of equity. During the nine months ended September 30, 2014, the Company made distributions of approximately $2.0 million to a holder of promoted interest related to HarborChase of Villages Crossing, which has been recorded as a reduction to capital in excess of par value in the accompanying condensed consolidated statement of stockholders’ equity and redeemable noncontrolling interest. | |
Adopted Accounting Pronouncements | ' |
Adopted Accounting Pronouncements — In February 2013, the Financial Accounting Standards Board (“FASB”) issued “ASU” No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.” This update clarified the guidance in subtopic 405 and requires entities to measure obligations resulting from joint and several liability arrangements for which total obligation is fixed at the reporting date. Entities are required to measure the obligation as the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus any additional amount the reporting entity expects to pay on behalf of its co-obligors. Additionally, the guidance requires entities to disclose the nature and amount of the obligations as well as other information about those obligations. Effective January 1, 2014, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows. | |
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a similar Tax Loss, or a Tax Credit Carryforward Exists.” This update clarified the guidance in subtopic 740 and requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward to the extent one is available. Effective January 1, 2014, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements — In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This update changes the criteria for reporting discontinued operations where only disposals representing a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, such as a major line of business or geographical area, should be presented as a discontinued operation. This ASU is effective prospectively for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014 with early adoption permitted. The Company has determined that the amendments will impact the Company’s determinations of which future property disposals, if any, qualify as discontinued operations and will require additional disclosure about discontinued operations for future property disposals, if any. | |
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” as a new Accounting Standard Concept (“ASC”) topic (Topic 606). The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard further provides guidance for any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, lease contracts). This ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, with earlier adoption not permitted. ASU 2014-09 can be adopted using one of two retrospective application methods: 1) retrospectively to each prior reporting period presented or 2) as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the amendments of ASU 2014-09; however, these amendments could potentially have a significant effect on the Company’s consolidated financial position, results of operations or cash flows. |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Acquisitions of Properties | ' | ||||||||||||||||
Real Estate Investment Properties — During the nine months ended September 30, 2014, the Company acquired the following 22 properties, which were comprised of 13 senior housing communities, three medical office buildings (“MOB”), three post-acute care hospitals, and three acute care hospitals: | |||||||||||||||||
Name and Location | Structure | Date | Purchase Price | ||||||||||||||
Acquired | (in thousands) | ||||||||||||||||
Acute Care | |||||||||||||||||
Houston Orthopedic & Spine Hospital | Triple-net Lease | 6/2/14 | $ | 49,000 | |||||||||||||
Bellaire, TX (“Houston”) | |||||||||||||||||
Medical Portfolio II Properties | |||||||||||||||||
Hurst Specialty Hospital | Modified Lease | 8/15/14 | 29,465 | ||||||||||||||
Hurst, TX (“Dallas/Fort Worth”) | |||||||||||||||||
Beaumont Specialty Hospital | Modified Lease | 8/15/14 | 33,600 | ||||||||||||||
Beaumont, TX (“Houston”) | |||||||||||||||||
Medical Office | |||||||||||||||||
Chula Vista Medical Arts Center - Plaza I | Modified Lease | 1/21/14 | 17,863 | (1) | |||||||||||||
Chula Vista, CA (“San Diego”) | |||||||||||||||||
Houston Orthopedic & Spine Hospital Medical Office Building | Modified Lease | 6/2/14 | 27,000 | ||||||||||||||
Bellaire, TX (“Houston”) | |||||||||||||||||
Lee Hughes Medical Building | Modified Lease | 9/29/14 | 29,870 | (1) | |||||||||||||
Glendale, CA (“Los Angeles”) | |||||||||||||||||
Post-Acute Care | |||||||||||||||||
Medical Portfolio II Properties | |||||||||||||||||
Oklahoma City Inpatient Rehabilitation Hospital | Modified Lease | 7/15/14 | 25,504 | ||||||||||||||
Oklahoma City, OK | |||||||||||||||||
Las Vegas Inpatient Rehabilitation Hospital | Modified Lease | 7/15/14 | 22,292 | ||||||||||||||
Las Vegas, NV | |||||||||||||||||
South Bend Inpatient Rehabilitation Hospital | Modified Lease | 7/15/14 | 20,240 | ||||||||||||||
Mishawaka, IN (“South Bend”) | |||||||||||||||||
Senior Housing | |||||||||||||||||
Pacific Northwest II Communities | |||||||||||||||||
Prestige Senior Living Auburn Meadows | Managed | 2/3/14 | 21,930 | ||||||||||||||
Auburn, WA (“Seattle”) | |||||||||||||||||
Prestige Senior Living Bridgewood | Managed | 2/3/14 | 22,096 | ||||||||||||||
Vancouver, WA (“Portland”) | |||||||||||||||||
Prestige Senior Living Monticello Park | Managed | 2/3/14 | 27,360 | ||||||||||||||
Longview, WA | |||||||||||||||||
Prestige Senior Living Rosemont | Managed | 2/3/14 | 16,877 | ||||||||||||||
Yelm, WA | |||||||||||||||||
Prestige Senior Living West Hills | Managed | 3/3/14 | 14,986 | ||||||||||||||
Corvallis, OR | |||||||||||||||||
South Bay II Communities | |||||||||||||||||
Isle at Cedar Ridge | Managed | 2/28/14 | 21,630 | ||||||||||||||
Cedar Park, TX (“Austin”) | |||||||||||||||||
HarborChase of Plainfield | Managed | 3/28/14 | 26,500 | ||||||||||||||
Plainfield, IL | |||||||||||||||||
Legacy Ranch Alzheimer’s Special Care Center | Managed | 3/28/14 | 11,960 | ||||||||||||||
Midland, TX | |||||||||||||||||
The Springs Alzheimer’s Special Care Center | Managed | 3/28/14 | 10,920 | ||||||||||||||
San Angelo, TX | |||||||||||||||||
Isle at Watercrest – Bryan | Managed | 4/21/14 | 22,050 | ||||||||||||||
Bryan, TX | |||||||||||||||||
Watercrest at Bryan | Managed | 4/21/14 | 28,035 | ||||||||||||||
Bryan, TX | |||||||||||||||||
Isle at Watercrest – Mansfield | Managed | 5/5/14 | 31,300 | ||||||||||||||
Mansfield, TX (“Dallas/Fort Worth”) | |||||||||||||||||
Watercrest at Mansfield | Managed | 6/30/14 | 49,000 | ||||||||||||||
Mansfield, TX (“Dallas/Fort Worth”) | |||||||||||||||||
$ | 559,478 | ||||||||||||||||
FOOTNOTE: | |||||||||||||||||
-1 | This represents a single property acquisition that is not considered material to the Company and as such no pro forma financial information has been included related to this property. | ||||||||||||||||
During the nine months ended September 30, 2013, the Company acquired the following properties, which were comprised of 13 medical office buildings, six post-acute care facilities, three senior housing communities, and one acute care hospital: | |||||||||||||||||
Name and Location | Structure | Date | Purchase Price | ||||||||||||||
Acquired | (in thousands) | ||||||||||||||||
Acute Care | |||||||||||||||||
Medical Portfolio I Properties | |||||||||||||||||
Doctors Specialty Hospital | Modified Lease | 8/16/13 | $ | 10,003 | |||||||||||||
Leawood, KS (“Kansas City”) | |||||||||||||||||
Medical Office | |||||||||||||||||
LaPorte Cancer Center | Modified Lease | 6/14/13 | 13,100 | ||||||||||||||
Westville, IN | |||||||||||||||||
Knoxville Medical Office Properties | |||||||||||||||||
Physicians Plaza A at North Knoxville Medical Center | Modified Lease | 7/10/13 | 18,124 | ||||||||||||||
Powell, TN (“Knoxville”) | |||||||||||||||||
Physicians Plaza B at North Knoxville Medical Center | Modified Lease | 7/10/13 | 21,800 | ||||||||||||||
Powell, TN (“Knoxville”) | |||||||||||||||||
Jefferson Medical Commons | Modified Lease | 7/10/13 | 11,616 | ||||||||||||||
Jefferson City, TN (“Knoxville”) | |||||||||||||||||
Physicians Regional Medical Center - Central Wing Annex | Modified Lease | 7/10/13 | 5,775 | ||||||||||||||
Knoxville, TN | |||||||||||||||||
Medical Portfolio I Properties | |||||||||||||||||
John C. Lincoln Medical Office Plaza I | Modified Lease | 8/16/13 | 4,420 | ||||||||||||||
Phoenix, AZ | |||||||||||||||||
John C. Lincoln Medical Office Plaza II | Modified Lease | 8/16/13 | 3,106 | ||||||||||||||
Phoenix, AZ | |||||||||||||||||
North Mountain Medical Plaza | Modified Lease | 8/16/13 | 6,185 | ||||||||||||||
Phoenix, AZ | |||||||||||||||||
Escondido Medical Arts Center | Modified Lease | 8/16/13 | 15,602 | ||||||||||||||
Escondido, CA (“San Diego”) | |||||||||||||||||
Chestnut Commons Medical Office Building | Modified Lease | 8/16/13 | 20,205 | ||||||||||||||
Elyria, OH (“Cleveland”) | |||||||||||||||||
Calvert Medical Office Properties | |||||||||||||||||
Calvert Medical Office Buildings I, II, III | Modified Lease | 8/30/13 | 16,409 | ||||||||||||||
Prince Frederick, MD (“Washington D.C.”) | |||||||||||||||||
Calvert Medical Arts Center | Modified Lease | 8/30/13 | 19,320 | ||||||||||||||
Prince Frederick, MD (“Washington D.C.”) | |||||||||||||||||
Dunkirk Medical Center | Modified Lease | 8/30/13 | 4,617 | ||||||||||||||
Dunkirk, MD (“Washington D.C.”) | |||||||||||||||||
Post-Acute Care | |||||||||||||||||
Perennial Communities | |||||||||||||||||
Batesville Healthcare Center | Triple-net Lease | 5/31/13 | 6,206 | ||||||||||||||
Batesville, AR | |||||||||||||||||
Broadway Healthcare Center | Triple-net Lease | 5/31/13 | 11,799 | ||||||||||||||
West Memphis, AR | |||||||||||||||||
Jonesboro Healthcare Center | Triple-net Lease | 5/31/13 | 15,232 | ||||||||||||||
Jonesboro, AR | |||||||||||||||||
Magnolia Healthcare Center | Triple-net Lease | 5/31/13 | 11,847 | ||||||||||||||
Magnolia, AR | |||||||||||||||||
Mine Creek Healthcare Center | Triple-net Lease | 5/31/13 | 3,373 | ||||||||||||||
Nashville, AR | |||||||||||||||||
Searcy Healthcare Center | Triple-net Lease | 5/31/13 | 7,898 | ||||||||||||||
Searcy, AR | |||||||||||||||||
Senior Housing | |||||||||||||||||
HarborChase of Jasper | Managed | 8/1/13 | 7,300 | ||||||||||||||
Jasper, AL | |||||||||||||||||
South Bay I Communities | |||||||||||||||||
Raider Ranch | Managed | 8/29/13 | 55,000 | ||||||||||||||
Lubbock, TX | |||||||||||||||||
Town Village | Managed | 8/29/13 | 22,500 | ||||||||||||||
Oklahoma City, OK | |||||||||||||||||
$ | 311,437 | ||||||||||||||||
Schedule of Purchase Price Allocation | ' | ||||||||||||||||
The following summarizes the purchase price allocation for the above properties, and the estimated fair values of the assets acquired and liabilities assumed (in thousands): | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Land and land improvements | $ | 46,064 | $ | 13,086 | |||||||||||||
Buildings and building improvements | 442,887 | 263,516 | |||||||||||||||
Furniture, fixtures and equipment | 10,014 | 5,135 | |||||||||||||||
Intangibles (1) | 67,431 | 33,138 | |||||||||||||||
Other liabilities | (8,718 | ) | (2,931 | ) | |||||||||||||
Mortgage note payable assumed (2) | (27,657 | ) | — | ||||||||||||||
Net assets acquired | 530,021 | 311,944 | |||||||||||||||
Contingent purchase price consideration | (12,395 | ) | (507 | ) | |||||||||||||
Total purchase price consideration | $ | 517,626 | $ | 311,437 | |||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles for the nine months ended September 30, 2014 and 2013 was approximately 7.1 years and 6.5 years, respectively. The acquired lease intangibles during the nine months ended September 30, 2014 were comprised of approximately $61.4 million and $6.0 million of in-place lease intangibles and other lease intangibles, respectively, and the acquired lease intangibles during the nine months ended September 30, 2013 were comprised of approximately $25.8 million and $7.3 million of in-place lease intangibles and other lease intangibles, respectively. | ||||||||||||||||
-2 | At the acquisition date, the fair value of the mortgage note payable assumed reflects an approximate $0.4 million premium on the above-market mortgage note payable assumed. | ||||||||||||||||
Schedule of Unaudited Proforma Results of Operations | ' | ||||||||||||||||
The following table presents the unaudited pro forma results of operations for the Company as if each of the properties were acquired as of January 1, 2013 and owned during the quarter and nine months ended September 30, 2014 and 2013 (in thousands except per share data): | |||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenues | $ | 50,724 | $ | 36,188 | $ | 146,933 | $ | 105,817 | |||||||||
Net income (loss) (1) | $ | (8,963 | ) | $ | 2,326 | $ | (29,640 | ) | $ | (20,756 | ) | ||||||
Loss per share of common stock (basic and diluted) | $ | (0.10 | ) | $ | 0.04 | $ | (0.33 | ) | $ | (0.39 | ) | ||||||
Weighted average number of shares of common stock outstanding (basic and diluted) (2) | 93,530 | 62,864 | 88,840 | 52,663 | |||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | The unaudited pro forma results for the quarter and nine months ended September 30, 2014, were adjusted to exclude approximately $3.1 million and $13.8 million, respectively, of acquisition related expenses directly attributable to the properties acquired during the quarter and nine months ended September 30, 2014. The unaudited pro forma results for the nine months ended September 30, 2013 were adjusted to include the approximate $13.8 million of acquisition related expenses, as if the properties acquired during the nine months ended September 30, 2014 had been acquired on January 1, 2013. The unaudited pro forma results for the quarter and nine months ended September 30, 2013 were adjusted to exclude approximately $6.3 million and $8.3 million, respectively, of acquisition related expenses directly attributable to the properties acquired during the quarter and nine months ended September 30, 2013. | ||||||||||||||||
-2 | As a result of the acquired properties being treated as operational since January 1, 2013, the Company assumed approximately 18.1 million shares were issued as of January 1, 2013. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2013 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented. | ||||||||||||||||
Gain Resulted From Change of Control in Equity Method Investment | ' | ||||||||||||||||
The following summarizes the gain that resulted from the change of control in the equity method investment for the quarter and nine months ended September 30, 2014 (in thousands): | |||||||||||||||||
Fair value of net assets acquired | $ | 10,129 | |||||||||||||||
Less: Previous investment in Montecito Joint Venture | (5,747 | ) | |||||||||||||||
Less: Cash paid to acquire co-venture partner’s interest | (1,584 | ) | |||||||||||||||
Gain on purchase of controlling interest of investment in unconsolidated entity | $ | 2,798 | |||||||||||||||
Montecito Joint Venture | ' | ||||||||||||||||
Schedule of Purchase Price Allocation | ' | ||||||||||||||||
The following summarizes the allocation of the purchase price, and the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands): | |||||||||||||||||
Land and land improvements | $ | 6,135 | |||||||||||||||
Buildings and building improvements | 13,728 | ||||||||||||||||
Intangibles (1) | 2,677 | ||||||||||||||||
Working capital, net | 87 | ||||||||||||||||
Other liabilities | (167 | ) | |||||||||||||||
Mortgage note payable assumed (2) | (12,331 | ) | |||||||||||||||
Net assets acquired | $ | 10,129 | |||||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 5.1 years and was comprised of approximately $1.9 million and $0.6 million of in-place lease intangibles and other lease intangibles, respectively. | ||||||||||||||||
-2 | At the acquisition date, the fair value of the mortgage note payable assumed reflects an approximate $0.6 million discount on the below-market mortgage note payable assumed. |
Real_Estate_Assets_net_Tables
Real Estate Assets, net (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Schedule of Real Estate Investment Properties | ' | ||||||||||
The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||
September 30, | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Land and land improvements | $ | 113,455 | $ | 59,208 | |||||||
Building and building improvements | 1,255,200 | 783,260 | |||||||||
Tenant improvements | 797 | — | |||||||||
Furniture, fixtures and equipment | 33,770 | 20,339 | |||||||||
Less: accumulated depreciation | (41,445 | ) | (14,016 | ) | |||||||
Real estate investment properties, net | 1,361,777 | 848,791 | |||||||||
Real estate under development, including land | 29,720 | 17,409 | |||||||||
Total real estate assets, net | $ | 1,391,497 | $ | 866,200 | |||||||
Under Development with Third-Party Developers | ' | ||||||||||
Schedule of Real Estate Investment Properties | ' | ||||||||||
As of September 30, 2014, four of the Company’s senior housing communities have real estate under development with third-party developers as follows (in thousands): | |||||||||||
Property Name (and Location) | Developer | Real Estate | Remaining | ||||||||
Development | Development | ||||||||||
Costs Incurred (1) | Budget (2) | ||||||||||
Raider Ranch | South Bay Partners, Ltd | $ | 3,669 | $ | 12,755 | ||||||
(Lubbock, TX) | |||||||||||
Wellmore of Tega Cay | Maxwell Group, Inc. | 14,104 | 25,050 | ||||||||
(Tega Cay, SC) | |||||||||||
Watercrest at Katy | South Bay Partners, Ltd | 6,131 | 33,311 | ||||||||
(Katy, TX) (3) | |||||||||||
HarborChase of Shorewood | Habor Shorewood Development, LLC | 5,816 | 20,109 | ||||||||
(Shorewood, WI) | |||||||||||
Total | $ | 29,720 | $ | 91,225 | |||||||
FOOTNOTES: | |||||||||||
(1) | This amount represents land and total capitalized costs for GAAP purposes for the acquisition, development and construction of the senior housing community as of September 30, 2014. Amounts include investment services fees, asset management fees, interest expense and other costs capitalized during the development period. | ||||||||||
(2) | This amount includes preleasing and marketing costs which will be expensed as incurred. | ||||||||||
(3) | This property is owned through a joint venture in which the Company’s initial ownership interest is 95%. |
Intangibles_net_Tables
Intangibles, net (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Schedule of Net Book Value of Intangibles | ' | ||||||||||||||||||||||||||||
The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
In-place lease intangibles | $ | 112,887 | $ | 49,642 | |||||||||||||||||||||||||
Above-market lease intangibles | 8,904 | 3,704 | |||||||||||||||||||||||||||
Below-market ground lease intangibles | 5,815 | 4,153 | |||||||||||||||||||||||||||
Less: accumulated amortization | (22,484 | ) | (5,099 | ) | |||||||||||||||||||||||||
Intangible assets, net | $ | 105,122 | $ | 52,400 | |||||||||||||||||||||||||
Below-market lease intangibles | $ | (11,501 | ) | $ | (2,987 | ) | |||||||||||||||||||||||
Above-market ground lease intangibles | (317 | ) | (317 | ) | |||||||||||||||||||||||||
Less: accumulated amortization | 720 | 168 | |||||||||||||||||||||||||||
Intangible liabilities, net (1) | $ | (11,098 | ) | $ | (3,136 | ) | |||||||||||||||||||||||
FOOTNOTE: | |||||||||||||||||||||||||||||
(1) | Intangible liabilities, net are included in other liabilities in the accompanying condensed consolidated balance sheets. | ||||||||||||||||||||||||||||
Schedule of Estimated Future Amortization and Weighted Average Remaining Useful Life | ' | ||||||||||||||||||||||||||||
The estimated future amortization on the Company’s intangibles for the remainder of 2014, each of the next four years and thereafter, in the aggregate, as of September 30, 2014 is as follows (in thousands): | |||||||||||||||||||||||||||||
In-place | Above- | Below- | Total Assets | Below- | Above- | Total | |||||||||||||||||||||||
Lease | market | market | market | market | Liabilities | ||||||||||||||||||||||||
Intangibles | Leases | Ground | Leases | Ground | |||||||||||||||||||||||||
Leases | Leases | ||||||||||||||||||||||||||||
2014 | $ | 6,963 | 367 | 37 | $ | 7,367 | $ | (286 | ) | (2 | ) | $ | (288 | ) | |||||||||||||||
2015 | 25,898 | 1,430 | 149 | 27,477 | (1,094 | ) | (8 | ) | (1,102 | ) | |||||||||||||||||||
2016 | 16,768 | 1,192 | 149 | 18,109 | (1,047 | ) | (8 | ) | (1,055 | ) | |||||||||||||||||||
2017 | 6,702 | 1,085 | 149 | 7,936 | (997 | ) | (8 | ) | (1,005 | ) | |||||||||||||||||||
2018 | 6,256 | 999 | 149 | 7,404 | (924 | ) | (8 | ) | (932 | ) | |||||||||||||||||||
Thereafter | 28,761 | 3,003 | 5,065 | 36,829 | (6,442 | ) | (274 | ) | (6,716 | ) | |||||||||||||||||||
$ | 91,348 | 8,076 | 5,698 | $ | 105,122 | $ | (10,790 | ) | (308 | ) | $ | (11,098 | ) | ||||||||||||||||
Weighted average remaining useful life as of September 30, 2014 (in years): | |||||||||||||||||||||||||||||
In-place | Above- | Below- | Below- | Above- | |||||||||||||||||||||||||
Lease | market | market | market | market | |||||||||||||||||||||||||
Intangibles | Leases | Ground | Leases | Ground | |||||||||||||||||||||||||
Leases | Leases | ||||||||||||||||||||||||||||
6.4 | 7.6 | 38.8 | 12.8 | 38.6 | |||||||||||||||||||||||||
Ground_and_Air_Rights_Leases_T
Ground and Air Rights Leases (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Schedule of Future Minimum Lease Payments | ' | ||||
The following are future minimum lease payments to be received under non-cancellable operating leases for the remainder of 2014, each of the next four years and thereafter, as of September 30, 2014 (in thousands): | |||||
2014 | $ | 13,092 | |||
2015 | 52,335 | ||||
2016 | 51,032 | ||||
2017 | 50,442 | ||||
2018 | 50,093 | ||||
Thereafter | 260,436 | ||||
$ | 477,430 | ||||
Ground and Air Rights Leases | ' | ||||
Schedule of Future Minimum Lease Payments | ' | ||||
The following is a schedule of future minimum lease payments to be paid under the ground and air rights leases for the remainder of 2014, each of the next four years and thereafter, in the aggregate, as of September 30, 2014 (in thousands): | |||||
2014 | $ | 54 | |||
2015 | 217 | ||||
2016 | 220 | ||||
2017 | 223 | ||||
2018 | 227 | ||||
Thereafter | 21,846 | ||||
$ | 22,787 | ||||
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Aggregate Carrying Amount and Major Classifications of Consolidated Assets | ' | ||||||||
The aggregate carrying amount and major classifications of the consolidated assets that can be used to settle obligations of the VIEs and liabilities of the consolidated VIEs that are non-recourse to the Company as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Assets: | |||||||||
Real estate investment properties, net | $ | 111,838 | $ | 72,053 | |||||
Real estate under development, including land | $ | 29,720 | $ | 16,210 | |||||
Intangibles, net | $ | 11,166 | $ | 4,535 | |||||
Cash | $ | 7,314 | $ | 727 | |||||
Loan costs, net | $ | 1,869 | $ | 912 | |||||
Other | $ | 1,020 | $ | 382 | |||||
Liabilities: | |||||||||
Mortgages and other notes payable | $ | 84,560 | $ | 52,596 | |||||
Accrued development costs | $ | 4,683 | $ | 7,047 | |||||
Other liabilities | $ | 1,581 | $ | 939 | |||||
Accounts payable and accrued expenses | $ | 829 | $ | 309 | |||||
Due to related parties | $ | 643 | $ | 112 | |||||
Unconsolidated_Entities_Tables
Unconsolidated Entities (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Summarized Operating Data of Unconsolidated Entities | ' | ||||||||||||||||
The following presents financial information for each of the Company’s unconsolidated entities as of and for the quarter and nine months ended September 30, 2014 (in thousands): | |||||||||||||||||
For the quarter ended September 30, 2014 | |||||||||||||||||
Montecito (2) | CHTSunIV (3) | Windsor | Total | ||||||||||||||
Manor | |||||||||||||||||
Revenues | $ | 328 | $ | — | $ | 2,172 | $ | 2,500 | |||||||||
Operating income | $ | 106 | $ | — | $ | 17 | $ | 123 | |||||||||
Net income (loss) | $ | 37 | $ | — | $ | (208 | ) | $ | (171 | ) | |||||||
Income allocable to other venture partners (1) | $ | 4 | $ | — | $ | (1 | ) | $ | 3 | ||||||||
Income (loss) allocable to the Company (1) | $ | 33 | $ | — | $ | (207 | ) | $ | (174 | ) | |||||||
Amortization of capitalized acquisition costs | (2 | ) | — | (4 | ) | (6 | ) | ||||||||||
Equity in earnings (loss) of unconsolidated entities | $ | 31 | $ | — | $ | (211 | ) | $ | (180 | ) | |||||||
Distributions declared to the Company | $ | 313 | $ | — | $ | 76 | $ | 389 | |||||||||
Distributions received by the Company (4) | $ | 174 | $ | — | $ | 2,493 | $ | 2,667 | |||||||||
For the nine months ended September 30, 2014 | |||||||||||||||||
Montecito (2) | CHTSunIV (3) | Windsor | Total | ||||||||||||||
Manor | |||||||||||||||||
Revenues | $ | 1,356 | $ | — | $ | 6,439 | $ | 7,795 | |||||||||
Operating income | $ | 436 | $ | — | $ | 114 | $ | 550 | |||||||||
Net income (loss) | $ | 165 | $ | — | $ | (950 | ) | $ | (785 | ) | |||||||
Income allocable to other venture partners (1) | $ | 17 | $ | — | $ | 373 | $ | 390 | |||||||||
Income (loss) allocable to the Company (1) | $ | 148 | $ | — | $ | (1,323 | ) | $ | (1,175 | ) | |||||||
Amortization of capitalized acquisition costs | (6 | ) | — | (12 | ) | (18 | ) | ||||||||||
Equity in earnings (loss) of unconsolidated entities | $ | 142 | $ | — | $ | (1,335 | ) | $ | (1,193 | ) | |||||||
Distributions declared to the Company (4) | $ | 659 | $ | — | $ | 2,853 | $ | 3,512 | |||||||||
Distributions received by the Company (4) | $ | 517 | $ | — | $ | 3,157 | $ | 3,674 | |||||||||
FOOTNOTES: | |||||||||||||||||
-1 | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | ||||||||||||||||
-2 | In August 2014, the Company acquired its co-venture partner’s 10% interest in the Montecito joint venture; refer to Note 3, “Acquisitions – Purchase of Controlling Interest in Montecito Joint Venture,” for additional information. | ||||||||||||||||
-3 | In July 2013, the Company completed the sale of its joint venture membership interest in CHTSunIV. | ||||||||||||||||
-4 | The distributions declared to and received by the Company for the Windsor Manor joint venture for the nine months ended September 30, 2014 include approximately $2.2 million of capital proceeds from a debt refinancing; refer to “Off-Balance Sheet Arrangements” for additional information. | ||||||||||||||||
The following presents financial information for each of the Company’s unconsolidated entities as of and for the quarter and nine months ended September 30, 2013 (in thousands): | |||||||||||||||||
For the quarter ended September 30, 2013 | |||||||||||||||||
Montecito (2) | CHTSunIV (3) | Windsor | Total | ||||||||||||||
Manor (2) | |||||||||||||||||
Revenues | $ | 446 | $ | — | $ | 2,043 | $ | 2,489 | |||||||||
Operating income | $ | 121 | $ | — | $ | (24 | ) | $ | 97 | ||||||||
Net income (loss) | $ | 21 | $ | — | $ | (251 | ) | $ | (230 | ) | |||||||
Income (loss) allocable to other venture partners (1) | $ | 2 | $ | — | $ | (524 | ) | $ | (522 | ) | |||||||
Income allocable to the Company (1) | $ | 19 | $ | — | $ | 273 | $ | 292 | |||||||||
Amortization of capitalized acquisition costs | (2 | ) | — | (6 | ) | (8 | ) | ||||||||||
Equity in earnings (loss) of unconsolidated entities | $ | 17 | $ | — | $ | 267 | $ | 284 | |||||||||
Distributions declared to the Company | $ | 357 | $ | — | $ | 107 | $ | 464 | |||||||||
Distributions received by the Company | $ | 342 | $ | 1,503 | $ | — | $ | 1,845 | |||||||||
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Montecito (2) | CHTSunIV (3) | Windsor | Total | ||||||||||||||
Manor (2) | |||||||||||||||||
Revenues | $ | 1,255 | $ | 24,107 | $ | 5,326 | $ | 30,688 | |||||||||
Operating income (loss) (4) | $ | 66 | $ | 3,603 | $ | (18 | ) | $ | 3,651 | ||||||||
Net loss | $ | (218 | ) | $ | (46 | ) | $ | (743 | ) | $ | (1,007 | ) | |||||
Loss allocable to other venture partners (1) | $ | (22 | ) | $ | (1,365 | ) | $ | (1,418 | ) | $ | (2,805 | ) | |||||
Income (loss) allocable to the Company (1) | $ | (196 | ) | $ | 1,319 | $ | 675 | $ | 1,798 | ||||||||
Amortization of capitalized acquisition costs | (6 | ) | (36 | ) | (12 | ) | (54 | ) | |||||||||
Equity in earnings (loss) of unconsolidated entities | $ | (202 | ) | $ | 1,283 | $ | 663 | $ | 1,744 | ||||||||
Distributions declared to the Company | $ | 699 | $ | 2,990 | $ | 287 | $ | 3,976 | |||||||||
Distributions received by the Company | $ | 342 | $ | 4,458 | $ | 224 | $ | 5,024 | |||||||||
FOOTNOTES: | |||||||||||||||||
-1 | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | ||||||||||||||||
-2 | Represents operating results from the date of acquisition through the end of the periods presented. | ||||||||||||||||
-3 | In July 2013, the Company completed the sale of its joint venture membership interest in CHTSunIV. | ||||||||||||||||
-4 | Includes approximately $0.3 million and $0.2 million of non-recurring acquisition expenses incurred by the Montecito and Windsor Manor joint ventures, respectively, for nine months ended September 30, 2013. |
Contingent_Purchase_Price_Cons1
Contingent Purchase Price Consideration (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Capital Health Communities | ' | ||||||||||||||||
Fair Value of Contingent Purchase Price Consideration | ' | ||||||||||||||||
assets in the accompanying condensed consolidated balance sheet. The following table provides a roll-forward of the fair value of the contingent purchase price consideration related to the Yield Guaranty on the Capital Health Communities for the quarter and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Beginning balance | $ | 3,509 | $ | 2,664 | $ | 4,488 | $ | 2,664 | |||||||||
Yield Guaranty payment received from seller | (301 | ) | — | (2,601 | ) | — | |||||||||||
Change in fair value | — | — | 1,321 | — | |||||||||||||
Ending balance | $ | 3,208 | $ | 2,664 | $ | 3,208 | $ | 2,664 | |||||||||
South Bay II Communities | ' | ||||||||||||||||
Fair Value of Contingent Purchase Price Consideration | ' | ||||||||||||||||
less (b) the purchase price paid at closing. The following table provides a roll-forward of the fair value of the estimated contingent purchase price consideration related to the South Bay II Communities for the quarter and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Beginning balance | $ | (8,500 | ) | $ | — | $ | — | $ | — | ||||||||
Contingent consideration in connection with acquisition | — | — | (12,395 | ) | — | ||||||||||||
Change in fair value | (1,800 | ) | — | (1,800 | ) | — | |||||||||||
Contingent consideration payment | 10,300 | — | 14,195 | — | |||||||||||||
Ending balance | $ | — | $ | — | $ | — | $ | — | |||||||||
Indebtedness_Tables
Indebtedness (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Details of Indebtedness | ' | ||||||||||||
The following table provides details of the Company’s indebtedness as of September 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||
September 30, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Mortgages payable and other notes payable: | |||||||||||||
Fixed rate debt | $ | 373,219 | $ | 290,817 | |||||||||
Variable rate debt (1) | 326,623 | 147,290 | |||||||||||
Mortgages and other notes payable | 699,842 | 438,107 | |||||||||||
Premium (discount), net (2) | (251 | ) | — | ||||||||||
Mortgages and other notes payable, net | 699,591 | 438,107 | |||||||||||
Revolving credit facility | 180,615 | 98,500 | |||||||||||
Total borrowings | $ | 880,206 | $ | 536,607 | |||||||||
FOOTNOTES: | |||||||||||||
-1 | As of September 30, 2014 and December 31, 2013, the Company had entered into forward-starting interest rate swaps for total notional amounts of approximately $269.4 million and $124.3 million, respectively, in order to hedge its exposure to this variable rate debt in future periods. The forward-starting interest rate swaps have a range of effective dates beginning in 2015 and continuing through the maturity date of the respective loan (ranging from 2016 through 2019). Refer to Note 12, “Derivative Financial Instruments,” for additional information. | ||||||||||||
-2 | Premium (discount), net is reflective of the Company recording mortgage note payables assumed at fair value on the respective acquisition date. | ||||||||||||
Schedule of Future Principal Payments and Maturity | ' | ||||||||||||
Maturities of indebtedness for the remainder of 2014 and each of the next four years and thereafter, in the aggregate, as of September 30, 2014 are as follows (in thousands): | |||||||||||||
2014 | $ | 3,020 | |||||||||||
2015 | 14,587 | ||||||||||||
2016 | 276,550 | ||||||||||||
2017 | 30,081 | ||||||||||||
2018 | 288,403 | ||||||||||||
Thereafter | 267,565 | ||||||||||||
$ | 880,206 | ||||||||||||
Schedule of Indebtedness | ' | ||||||||||||
The following table provides details as of September 30, 2014 (in thousands): | |||||||||||||
Property and Loan Type | Interest Rate at | Payment Terms | Maturity | September 30, | |||||||||
September 30, 2014 (1) | Date (2) | 2014 | |||||||||||
Pacific Northwest II Communities; Mortgage Loan | 4.30% | Monthly principal and interest payments based on a 30-year amortization schedule | 12/5/18 | $ | 62,309 | ||||||||
per annum | |||||||||||||
Isle at Watercrest – | 4.68% | Monthly principal and interest payments based on a total payment of $143,330 | 6/1/23 | 27,181 | |||||||||
Mansfield; Mortgage Loan (3) | per annum | ||||||||||||
Total fixed rate debt | 89,490 | ||||||||||||
Wellmore of Tega Cay; | 30-day LIBOR | Monthly interest only payments through February 2019; principal and interest payments thereafter based on 25-year amortization schedule | 2/6/19 | 1,229 | |||||||||
Construction Loan | (with floor | ||||||||||||
of 0.50%) plus | |||||||||||||
5.4% per annum | |||||||||||||
Houston Orthopedic & Spine Hospital and Medical Building; | 90-day LIBOR | Monthly principal and interest payments based on a 30-year amortization schedule | 6/1/19 | 49,814 | |||||||||
Mortgage Loan | plus 2.85% per | ||||||||||||
annum | |||||||||||||
Medical Portfolio II Properties; | 90-day LIBOR | Monthly principal and interest payments based on 25-year amortization schedule | 7/14/19 | 85,445 | |||||||||
Mortgage Loan | (with 0.25% | ||||||||||||
floor) plus 2.35% | |||||||||||||
per annum | |||||||||||||
Claremont Medical Office; | 30-day LIBOR | Monthly principal and interest payments based upon a 30-year amortization schedule | 1/15/18 | 12,958 | |||||||||
Mortgage Loan (4) | plus 2.6% | ||||||||||||
per annum | |||||||||||||
Lee Hughes Medical Building; | 30-day LIBOR | Monthly principal and interest payments based upon a 30-year amortization schedule | 9/5/16 | 19,250 | |||||||||
Mortgage Loan | plus 1.85% | ||||||||||||
per annum | |||||||||||||
Total variable rate debt | 168,696 | ||||||||||||
Fixed and variable rate debt | 258,186 | ||||||||||||
Premium (discount), net | (251 | ) | |||||||||||
Total debt | $ | 257,935 | |||||||||||
FOOTNOTES: | |||||||||||||
(1) | The 30-day LIBOR and 90-day LIBOR were approximately 0.16% and 0.24%, respectively, as September 30, 2014. | ||||||||||||
(2) | Represents the initial maturity date (or, as applicable, the maturity date as extended). The maturity date may be extended beyond the date shown subject to certain lender conditions. | ||||||||||||
(3) | The balance for this loan excludes a premium of $0.4 million related to the mortgage note payable assumed being recorded at fair value on the acquisition date. | ||||||||||||
(4) | The balance for this loan excludes a discount of $0.6 million related to the mortgage note payable assumed being recorded at fair value on the acquisition date. |
Related_Party_Arrangements_Tab
Related Party Arrangements (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Related Parties | ' | ||||||||||||||||||||||||
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursible, Foregone and Related Amounts Unpaid | ' | ||||||||||||||||||||||||
The expenses and fees incurred by and reimbursable to the Company’s related parties for the quarters and nine months ended September 30, 2014 and 2013, and related amounts unpaid as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||
Quarter ended | Nine Months Ended | Unpaid amounts as of (1) | |||||||||||||||||||||||
September 30, | September 30, | September 30, | December 31, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Reimbursable expenses: | |||||||||||||||||||||||||
Offering costs (2) | $ | 1,075 | $ | 692 | $ | 3,442 | $ | 2,714 | $ | 345 | $ | 612 | |||||||||||||
Operating expenses (3) | 918 | 667 | 2,402 | 1,776 | 594 | 915 | |||||||||||||||||||
Acquisition fees and expenses | 130 | 97 | 463 | 336 | — | 138 | |||||||||||||||||||
2,123 | 1,456 | 6,307 | 4,826 | 939 | 1,665 | ||||||||||||||||||||
Investment services fees (4) | 3,651 | 4,584 | 11,875 | 6,450 | 523 | — | |||||||||||||||||||
Disposition fee (5) | — | 608 | — | 608 | — | — | |||||||||||||||||||
Financing coordination fees (6) | — | — | 220 | — | — | — | |||||||||||||||||||
Property management fees (7) | 728 | 295 | 1,763 | 879 | 459 | 322 | |||||||||||||||||||
Asset management fees (8) | 3,696 | 1,264 | 9,510 | 2,898 | 420 | 894 | |||||||||||||||||||
Interest reserve and other advances (9) | — | — | — | — | 8 | 286 | |||||||||||||||||||
$ | 10,198 | $ | 8,207 | $ | 29,675 | $ | 15,661 | $ | 2,349 | $ | 3,167 | ||||||||||||||
FOOTNOTES: | |||||||||||||||||||||||||
(1) | Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. | ||||||||||||||||||||||||
(2) | Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders’ equity and redeemable noncontrolling interest. | ||||||||||||||||||||||||
(3) | Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||
(4) | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $3.7 million and $11.9 million, respectively, in investment services fees of which approximately $0.4 million and $1.6 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $4.6 million and $6.4 million, respectively, in investment service fees, of which approximately $0.5 million, was capitalized as part of its investment in the Montecito Joint Venture and the additional Windsor Manor II Communities, and included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet. Investment service fees, that are not capitalized, are recorded as acquisition fees and expenses in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||
(5) | Amounts are recorded as a reduction to gain on sale of investment in unconsolidated entity in the accompanying consolidated statements of operations. | ||||||||||||||||||||||||
(6) | For the nine months ended September 30, 2014, the Company incurred approximately $0.2 million in financing coordination fees, which was capitalized and included in its investment in the Windsor Manor Joint Venture. There were no financing coordination fees for the quarter and nine months ended September 30, 2013. | ||||||||||||||||||||||||
(7) | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $0.7 million and $1.8 million, respectively, in property and construction management fees payable to the Property Manager of which approximately $0.2 million and $0.3 million, respectively, in construction management fees were capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $0.3 million and $0.9 million, respectively, in property and construction management fees payable to the Property Manager of which $0.07 million and $0.2 million, respectively, was capitalized and included in real estate under development. | ||||||||||||||||||||||||
(8) | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $3.7 million and $9.5 million, respectively, in asset management fees payable to the Advisor of which approximately $0.9 million and $3.8 million, respectively, was forgone in accordance with the terms of the Advisor Expense Support Agreement and approximately $0.1 million and $0.2 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $1.3 million and $3.4 million, respectively, in asset management fees payable to the Advisor of which approximately $0.5 million for the nine months ended September 30, 2013 was forgone in accordance with the terms of the Expense Support Agreement and approximately $0.2 million and $0.2 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. | ||||||||||||||||||||||||
(9) | Amounts primarily consists of an interest reserve account related to the acquisition, development and construction loan (“ADC Loan”) that the Company originated in June 2013. | ||||||||||||||||||||||||
Public Offering | Advisor | ' | ||||||||||||||||||||||||
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursible, Foregone and Related Amounts Unpaid | ' | ||||||||||||||||||||||||
The fees incurred by and reimbursable to the Advisor in connection with the Company’s Offering for the quarters and nine months ended September 30, 2014 and 2013, and related amounts unpaid as of September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||
Quarter ended | Nine Months Ended | Unpaid amounts as of (1) | |||||||||||||||||||||||
September 30, | September 30, | September 30, | December 31, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Selling commissions (2) | $ | 6,689 | $ | 3,247 | $ | 12,285 | $ | 7,165 | $ | 170 | $ | 71 | |||||||||||||
Marketing support fees (2) | 4,524 | 3,252 | 9,937 | 8,463 | 135 | 70 | |||||||||||||||||||
$ | 11,213 | $ | 6,499 | $ | 22,222 | $ | 15,628 | $ | 305 | $ | 141 | ||||||||||||||
Expense Support Agreements | ' | ||||||||||||||||||||||||
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursible, Foregone and Related Amounts Unpaid | ' | ||||||||||||||||||||||||
The following fees were foregone in connection with the Expense Support Agreements for the quarter and nine months ended September 30, 2014 and 2013, and cumulatively as of September 30, 2014 (in thousands, except offering price): | |||||||||||||||||||||||||
Quarter ended | Nine Months Ended | As of | |||||||||||||||||||||||
September 30, | September 30, | September 30, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | |||||||||||||||||||||
Asset management fees (1) | $ | 884 | $ | — | $ | 3,764 | $ | 474 | $ | 5,166 | |||||||||||||||
Then-current offering price | $ | 10.14 | $ | 10 | $ | 10.14 | $ | 10 | $ | 10.14 | |||||||||||||||
Restricted stock shares (2) | 87 | — | 371 | 47 | 510 | ||||||||||||||||||||
Cash distributions on Restricted Stock (3) | $ | 30 | $ | — | $ | 48 | $ | — | $ | 53 | |||||||||||||||
Stock distributions on Restricted Stock (4) | 2 | — | 4 | — | 4 | ||||||||||||||||||||
FOOTNOTES: | |||||||||||||||||||||||||
(1) | No other amounts have been forgone in connection with the Expense Support Agreements for the quarter and nine months ended September 30, 2014 and 2013, and cumulatively as of September 30, 2014. | ||||||||||||||||||||||||
(2) | Restricted stock shares are comprised of approximately 0.42 million issued to the Advisor and approximately 0.09 million issuable to the Advisor as of September 30, 2014. Since the vesting conditions were not met through September 30, 2014, no fair value was assigned to the restricted stock shares as the shares were valued at zero, which represents the lowest possible value estimated at vesting. In addition, the restricted stock shares were treated as unissued for financial reporting purposes because the vesting criteria had not been met through September 30, 2014. | ||||||||||||||||||||||||
(3) | The cash distributions have been recognized as compensation expense as issued and included in general and administrative expense in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||
(4) | The par value of the stock distributions has been recognized as compensation expense as issued and included in general and administrative expense in the accompanying condensed consolidated statements of operations. |
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Summary of Gross and Net Amounts of Derivative Financial Instruments Presented in Condensed Consolidated Balance Sheet | ' | ||||||||||||||||||||||||||||
The following table summarizes the terms of the derivative financial instruments held by the Company or through its joint venture and the asset (liability) that has been recorded (in thousands): | |||||||||||||||||||||||||||||
Fair value | |||||||||||||||||||||||||||||
asset (liability) as of | |||||||||||||||||||||||||||||
Notional | Strike (1) | Credit | Trade | Forward | Maturity | September 30, | December 31, | ||||||||||||||||||||||
Amount | Spread (1) | date | date | date | 2014 | 2013 | |||||||||||||||||||||||
$12,421(2) | 1.3 | % | 2.6 | % | 1/17/13 | 1/15/15 | 1/16/18 | $ | 7 | $ | 115 | ||||||||||||||||||
$38,255(2) | 2.7 | % | 2.5 | % | 9/6/13 | 8/17/15 | 7/10/18 | $ | (928 | ) | $ | (590 | ) | ||||||||||||||||
$26,067(2) | 2.8 | % | 2.5 | % | 9/6/13 | 8/17/15 | 8/29/18 | $ | (689 | ) | $ | (435 | ) | ||||||||||||||||
$30,000(2) | 1.1 | % | 2.7 | % | 10/22/13 | 8/5/15 | 8/19/16 | $ | (35 | ) | $ | (10 | ) | ||||||||||||||||
$29,952(2) | 0.9 | % | 4.3 | % | 11/13/13 | 5/11/15 | 5/31/16 | $ | (31 | ) | $ | (8 | ) | ||||||||||||||||
$11,000(3) | 3 | % | — | % | 6/27/14 | 6/30/14 | 6/30/17 | $ | 21 | $ | — | ||||||||||||||||||
$48,415(2) | 2.4 | % | 2.9 | % | 8/15/14 | 6/1/16 | 6/2/19 | $ | 206 | $ | — | ||||||||||||||||||
$84,251(2) | 2.3 | % | 2.4 | % | 9/12/14 | 8/1/15 | 7/15/19 | $ | (330 | ) | $ | — | |||||||||||||||||
FOOTNOTES: | |||||||||||||||||||||||||||||
(1) | The all-in rates for each derivative financial instrument are equal to the sum of the Strike and Credit Spread detailed above. | ||||||||||||||||||||||||||||
(2) | Amounts related to interest rate swaps held by the Company or its subsidiaries, which are recorded at fair value and included in either other assets or other liabilities in the accompanying condensed consolidated balance sheets. | ||||||||||||||||||||||||||||
(3) | Amounts related to the interest rate cap held by the Windsor Manor Joint Venture for which the proportionate amounts of fair value relative to the Company’s ownership percentage are included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheets. |
Equity_Tables
Equity (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Effect of Derivative Financial Instruments | ' | ||||||||||||||||||
The following table reflects the effect of derivative financial instruments held by Company, or its equity method investments, and included in the condensed consolidated statements of comprehensive loss for the quarter and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||||
Derivative Financial | Gain (loss) recognized in | Location of | Gain (loss) reclassified | ||||||||||||||||
Instrument | other comprehensive loss | gain (loss) | from AOCI into earnings | ||||||||||||||||
on derivative financial | reclassified | (Effective Portion) | |||||||||||||||||
instrument | into earnings | ||||||||||||||||||
(Effective Portion) | (Effective | ||||||||||||||||||
Portion) | |||||||||||||||||||
Quarter Ended | Quarter Ended September 30, | ||||||||||||||||||
September 30, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Interest rate swaps | $ | 224 | $ | (1,230 | ) | Not applicable | $ | — | $ | — | |||||||||
Interest rate cap held by unconsolidated joint venture | (2 | ) | — | Not applicable | — | — | |||||||||||||
Interest rate swap held by unconsolidated joint venture | — | (69 | ) | Not applicable | — | — | |||||||||||||
Total | $ | 222 | $ | (1,299 | ) | $ | — | $ | — | ||||||||||
Derivative Financial | Gain (loss) recognized in | Location of | Gain (loss) reclassified | ||||||||||||||||
Instrument | other comprehensive loss | gain (loss) | from AOCI into earnings | ||||||||||||||||
on derivative financial | reclassified | (Effective Portion) | |||||||||||||||||
instrument | into earnings | ||||||||||||||||||
(Effective Portion) | (Effective | ||||||||||||||||||
Portion) | |||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Interest rate swaps | $ | (872 | ) | $ | (1,230 | ) | Not applicable | $ | — | $ | — | ||||||||
Interest rate cap held by unconsolidated joint venture | 21 | — | Not applicable | — | — | ||||||||||||||
Interest rate swap held by unconsolidated joint venture | — | 62 | Not applicable | — | — | ||||||||||||||
Total | $ | (851 | ) | $ | (1,168 | ) | $ | — | $ | — | |||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Components of Income Tax Benefit (Expense) | ' | ||||||||||||||||
The components of the income tax benefit (expense) for the quarter and nine months ended September 30, 2014 are as follows (in thousands): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Current: | |||||||||||||||||
Federal | $ | — | $ | — | $ | — | $ | 13 | |||||||||
State | (37 | ) | — | (9 | ) | — | |||||||||||
Total current benefit (expense) | (37 | ) | — | (9 | ) | 13 | |||||||||||
Deferred: | |||||||||||||||||
Federal | — | — | — | (25 | ) | ||||||||||||
State | — | — | — | (6 | ) | ||||||||||||
Total deferred expense | — | — | — | (31 | ) | ||||||||||||
Income tax benefit (expense) | $ | (37 | ) | $ | — | $ | (9 | ) | $ | (18 | ) | ||||||
Significant Components of Deferred Tax Assets | ' | ||||||||||||||||
Significant components of the Company’s deferred tax assets as of September 30, 2014 are as follows: | |||||||||||||||||
Carryforwards of net operating loss | $ | 1,787 | |||||||||||||||
Prepaid rent | 337 | ||||||||||||||||
Valuation allowance | (2,124 | ) | |||||||||||||||
Net deferred tax assets | $ | — | |||||||||||||||
Reconciliation of Income Tax Benefit (Expense) | ' | ||||||||||||||||
A reconciliation of the income tax benefit (expense) computed at the statutory federal tax rate on income before income taxes is as follows (in thousands): | |||||||||||||||||
Quarter Ended September 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Tax expense computed at federal statutory rate | $ | (4,259 | ) | (35.00 | )% | $ | (806 | ) | (35.00 | )% | |||||||
Benefit of REIT election | 4,259 | 35 | % | 806 | 35 | % | |||||||||||
State income tax expense | (37 | ) | (0.30 | )% | — | — | % | ||||||||||
Income tax expense | $ | (37 | ) | (0.30 | )% | $ | — | — | % | ||||||||
Nine Months Ended September 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Tax expense computed at federal statutory rate | $ | (12,957 | ) | (35.00 | )% | $ | (3,130 | ) | (35.00 | )% | |||||||
Benefit of REIT election | 12,957 | 35 | % | 3,118 | 34.86 | % | |||||||||||
State income tax expense | (9 | ) | (0.02 | )% | (6 | ) | (0.07 | )% | |||||||||
Income tax expense | $ | (9 | ) | (0.02 | )% | $ | (18 | ) | (0.21 | )% | |||||||
Organization_Additional_Inform
Organization - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 0 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 27, 2011 | Nov. 04, 2014 | Jun. 27, 2011 | Nov. 04, 2014 |
Subsequent Event | IPO | Follow-On Offering | ||||
Subsequent Event | ||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' | ' | ' | ' | ' |
CNL properties Trust, Inc. organized date | 8-Jun-10 | ' | ' | ' | ' | ' |
Subscriptions received for common stock | $345,854 | $387,363 | ' | ' | $3,000,000 | $1,000,000 |
Face amount or stated value of common stock per share | $0.01 | $0.01 | $10 | ' | ' | ' |
Common stock offering price per share | ' | ' | $10.14 | $10.58 | ' | ' |
Offering price for reinvestment plan | ' | ' | $9.64 | $10.06 | ' | ' |
Continuous Follow-On Offering, extended date | ' | ' | ' | ' | ' | 30-Jan-15 |
Maximum expected date to sell shares of common stock | ' | ' | ' | ' | ' | 31-Dec-15 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Summary Of Significant Accounting Policies [Line Items] | ' |
Membership interest in joint venture | 95.00% |
Redeemable noncontrolling interest in joint venture | 5.00% |
Distributions to promoted interest holders | $2,000 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||
Jul. 31, 2014 | Jun. 30, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jan. 31, 2013 | Sep. 30, 2013 | |
Property | Senior Housing | Senior Housing | Medical Office | Medical Office | Acute Care Hospital | Acute Care Hospital | Montecito Joint Venture | Montecito Joint Venture | Montecito Joint Venture | Montecito Joint Venture | Post-acute Care Facilities | |||||||
Property | Property | Property | Property | Property | Property | Property | ||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties acquired | ' | ' | ' | ' | ' | 22 | ' | 13 | 3 | 3 | 13 | 3 | 1 | ' | ' | ' | ' | 6 |
Revenues attributable to properties | ' | ' | ' | $19,800,000 | $5,900,000 | $4,700,000 | $2,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) attributable to properties | ' | ' | ' | 36,500,000 | 6,500,000 | 15,300,000 | 3,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price of land | 2,200,000 | 4,000,000 | 2,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum development budget | 25,600,000 | 38,200,000 | 35,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of membership interest acquired | ' | 95.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | 90.00% | ' |
Capital of joint venture | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,000,000 | ' |
Co-venture partner's interest in the acquired business | ' | ' | ' | 5.00% | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' |
Acquisition of co-venture partner's membership interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Payment to acquire interest in joint ventures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' | ' | ' | ' |
Previous investment in Montecito Joint Venture | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,700,000 | 5,747,000 | 5,747,000 | ' | ' |
Gain from change of control in equity method investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,800,000 | ' | ' | ' | ' |
Acquisitions_of_Properties_Det
Acquisitions of Properties (Detail) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | |
Business Acquisition [Line Items] | ' | ' | |
Purchase Price | $559,478 | $311,437 | |
Houston Orthopedic & Spine Hospital | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Bellaire, TX (bHoustonb) | ' | |
Structure | 'Triple-net Lease | ' | |
Date Acquired | 2-Jun-14 | ' | |
Purchase Price | 49,000 | ' | |
Hurst Specialty Hospital | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Hurst, TX (bDallas/Fort Worthb) | ' | |
Structure | 'Modified Lease | ' | |
Date Acquired | 15-Aug-14 | ' | |
Purchase Price | 29,465 | ' | |
Beaumont Specialty Hospital | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Beaumont, TX (bHoustonb) | ' | |
Structure | 'Modified Lease | ' | |
Date Acquired | 15-Aug-14 | ' | |
Purchase Price | 33,600 | ' | |
Chula Vista Medical Arts Center - Plaza I | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Chula Vista, CA (bSan Diegob) | ' | |
Structure | 'Modified Lease | ' | |
Date Acquired | 21-Jan-14 | ' | |
Purchase Price | 17,863 | [1] | ' |
Houston Orthopedic & Spine Hospital Medical Office Building | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Bellaire, TX (bHoustonb) | ' | |
Structure | 'Modified Lease | ' | |
Date Acquired | 2-Jun-14 | ' | |
Purchase Price | 27,000 | ' | |
Lee Hughes Medical Building | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Glendale, CA (bLos Angelesb) | ' | |
Structure | 'Modified Lease | ' | |
Date Acquired | 29-Sep-14 | ' | |
Purchase Price | 29,870 | [1] | ' |
Oklahoma City Inpatient Rehabilitation Hospital | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Oklahoma City, OK | ' | |
Structure | 'Modified Lease | ' | |
Date Acquired | 15-Jul-14 | ' | |
Purchase Price | 25,504 | ' | |
Las Vegas Inpatient Rehabilitation Hospital | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Las Vegas, NV | ' | |
Structure | 'Modified Lease | ' | |
Date Acquired | 15-Jul-14 | ' | |
Purchase Price | 22,292 | ' | |
South Bend Inpatient Rehabilitation Hospital | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Mishawaka, IN (bSouth Bendb) | ' | |
Structure | 'Modified Lease | ' | |
Date Acquired | 15-Jul-14 | ' | |
Purchase Price | 20,240 | ' | |
Prestige Senior Living Auburn Meadows | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Auburn, WA (bSeattleb) | ' | |
Structure | 'Managed | ' | |
Date Acquired | 3-Feb-14 | ' | |
Purchase Price | 21,930 | ' | |
Prestige Senior Living Bridgewood | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Vancouver, WA (bPortlandb) | ' | |
Structure | 'Managed | ' | |
Date Acquired | 3-Feb-14 | ' | |
Purchase Price | 22,096 | ' | |
Prestige Senior Living Monticello Park | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Longview, WA | ' | |
Structure | 'Managed | ' | |
Date Acquired | 3-Feb-14 | ' | |
Purchase Price | 27,360 | ' | |
Prestige Senior Living Rosemont | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Yelm, WA | ' | |
Structure | 'Managed | ' | |
Date Acquired | 3-Feb-14 | ' | |
Purchase Price | 16,877 | ' | |
Prestige Senior Living West Hills | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Corvallis, OR | ' | |
Structure | 'Managed | ' | |
Date Acquired | 3-Mar-14 | ' | |
Purchase Price | 14,986 | ' | |
Isle at Cedar Ridge | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Cedar Park, TX (bAustinb) | ' | |
Structure | 'Managed | ' | |
Date Acquired | 28-Feb-14 | ' | |
Purchase Price | 21,630 | ' | |
HarborChase of Plainfield | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Plainfield, IL | ' | |
Structure | 'Managed | ' | |
Date Acquired | 28-Mar-14 | ' | |
Purchase Price | 26,500 | ' | |
Legacy Ranch Alzheimer's Special Care Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Midland, TX | ' | |
Structure | 'Managed | ' | |
Date Acquired | 28-Mar-14 | ' | |
Purchase Price | 11,960 | ' | |
The Springs Alzheimer's Special Care Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'San Angelo, TX | ' | |
Structure | 'Managed | ' | |
Date Acquired | 28-Mar-14 | ' | |
Purchase Price | 10,920 | ' | |
Isle at Watercrest - Bryan | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Bryan, TX | ' | |
Structure | 'Managed | ' | |
Date Acquired | 21-Apr-14 | ' | |
Purchase Price | 22,050 | ' | |
Watercrest at Bryan | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Bryan, TX | ' | |
Structure | 'Managed | ' | |
Date Acquired | 21-Apr-14 | ' | |
Purchase Price | 28,035 | ' | |
Isle at Watercrest - Mansfield | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Mansfield, TX (bDallas/Fort Worthb) | ' | |
Structure | 'Managed | ' | |
Date Acquired | 5-May-14 | ' | |
Purchase Price | 31,300 | ' | |
Watercrest at Mansfield | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | 'Mansfield, TX (bDallas/Fort Worthb) | ' | |
Structure | 'Managed | ' | |
Date Acquired | 30-Jun-14 | ' | |
Purchase Price | 49,000 | ' | |
Doctors Specialty Hospital | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Leawood, KS (bKansas Cityb) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 16-Aug-13 | |
Purchase Price | ' | 10,003 | |
LaPorte Cancer Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Westville, IN | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 14-Jun-13 | |
Purchase Price | ' | 13,100 | |
Physicians Plaza A at North Knoxville Medical Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Powell, TN (bKnoxvilleb) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 10-Jul-13 | |
Purchase Price | ' | 18,124 | |
Physicians Plaza B at North Knoxville Medical Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Powell, TN (bKnoxvilleb) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 10-Jul-13 | |
Purchase Price | ' | 21,800 | |
Jefferson Medical Commons | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Jefferson City, TN (bKnoxvilleb) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 10-Jul-13 | |
Purchase Price | ' | 11,616 | |
Physicians Regional Medical Center - Central Wing Annex | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Knoxville, TN | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 10-Jul-13 | |
Purchase Price | ' | 5,775 | |
John C. Lincoln Medical Office Plaza I | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Phoenix, AZ | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 16-Aug-13 | |
Purchase Price | ' | 4,420 | |
John C. Lincoln Medical Office Plaza II | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Phoenix, AZ | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 16-Aug-13 | |
Purchase Price | ' | 3,106 | |
North Mountain Medical Plaza | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Phoenix, AZ | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 16-Aug-13 | |
Purchase Price | ' | 6,185 | |
Escondido Medical Arts Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Escondido, CA (bSan Diegob) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 16-Aug-13 | |
Purchase Price | ' | 15,602 | |
Chestnut Commons Medical Office Building | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Elyria, OH (bClevelandb) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 16-Aug-13 | |
Purchase Price | ' | 20,205 | |
Calvert Medical Office Buildings I, II, III | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Prince Frederick, MD (bWashington D.C.b) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 30-Aug-13 | |
Purchase Price | ' | 16,409 | |
Calvert Medical Arts Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Prince Frederick, MD (bWashington D.C.b) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 30-Aug-13 | |
Purchase Price | ' | 19,320 | |
Dunkirk Medical Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Dunkirk, MD (bWashington D.C.b) | |
Structure | ' | 'Modified Lease | |
Date Acquired | ' | 30-Aug-13 | |
Purchase Price | ' | 4,617 | |
Batesville Healthcare Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Batesville, AR | |
Structure | ' | 'Triple-net Lease | |
Date Acquired | ' | 31-May-13 | |
Purchase Price | ' | 6,206 | |
Broadway Healthcare Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'West Memphis, AR | |
Structure | ' | 'Triple-net Lease | |
Date Acquired | ' | 31-May-13 | |
Purchase Price | ' | 11,799 | |
Jonesboro Healthcare Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Jonesboro, AR | |
Structure | ' | 'Triple-net Lease | |
Date Acquired | ' | 31-May-13 | |
Purchase Price | ' | 15,232 | |
Magnolia Healthcare Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Magnolia, AR | |
Structure | ' | 'Triple-net Lease | |
Date Acquired | ' | 31-May-13 | |
Purchase Price | ' | 11,847 | |
Mine Creek Healthcare Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Nashville, AR | |
Structure | ' | 'Triple-net Lease | |
Date Acquired | ' | 31-May-13 | |
Purchase Price | ' | 3,373 | |
Searcy Healthcare Center | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Searcy, AR | |
Structure | ' | 'Triple-net Lease | |
Date Acquired | ' | 31-May-13 | |
Purchase Price | ' | 7,898 | |
HarborChase of Jasper | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Jasper, AL | |
Structure | ' | 'Managed | |
Date Acquired | ' | 1-Aug-13 | |
Purchase Price | ' | 7,300 | |
Raider Ranch | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Lubbock, TX | |
Structure | ' | 'Managed | |
Date Acquired | ' | 29-Aug-13 | |
Purchase Price | ' | 55,000 | |
Town Village | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Location | ' | 'Oklahoma City, OK | |
Structure | ' | 'Managed | |
Date Acquired | ' | 29-Aug-13 | |
Purchase Price | ' | $22,500 | |
[1] | This represents a single property acquisition that is not considered material to the Company and as such no pro forma financial information has been included related to this property. |
Schedule_of_Purchase_Price_All
Schedule of Purchase Price Allocation (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Aug. 31, 2014 | |||
In Thousands, unless otherwise specified | Montecito Joint Venture | Montecito Joint Venture | |||||
Schedule of Business Acquisitions, Purchase Price Allocation [Line Items] | ' | ' | ' | ' | |||
Land and land improvements | $46,064 | $13,086 | ' | $6,135 | |||
Buildings and building improvements | 442,887 | 263,516 | ' | 13,728 | |||
Furniture, fixtures and equipment | 10,014 | 5,135 | ' | ' | |||
Intangibles | 67,431 | [1] | 33,138 | [1] | ' | 2,677 | [2] |
Other liabilities | -8,718 | -2,931 | ' | -167 | |||
Mortgage note payable assumed | -27,657 | [3] | ' | ' | -12,331 | [4] | |
Net assets acquired | 530,021 | 311,944 | 10,129 | 10,129 | |||
Contingent purchase price consideration | -12,395 | -507 | ' | ' | |||
Total purchase price consideration | 517,626 | 311,437 | ' | ' | |||
Working capital, net | ' | ' | ' | $87 | |||
[1] | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles for the nine months ended September 30, 2014 and 2013 was approximately 7.1 years and 6.5 years, respectively. The acquired lease intangibles during the nine months ended September 30, 2014 were comprised of approximately $61.4 million and $6.0 million of in-place lease intangibles and other lease intangibles, respectively, and the acquired lease intangibles during the nine months ended September 30, 2013 were comprised of approximately $25.8 million and $7.3 million of in-place lease intangibles and other lease intangibles, respectively. | ||||||
[2] | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 5.1 years and was comprised of approximately $1.9 million and $0.6 million of in-place lease intangibles and other lease intangibles, respectively. | ||||||
[3] | At the acquisition date, the fair value of the mortgage note payable assumed reflects an approximate $0.4 million premium on the above-market mortgage note payable assumed. | ||||||
[4] | At the acquisition date, the fair value of the mortgage note payable assumed reflects an approximate $0.6 million discount on the below-market mortgage note payable assumed. |
Schedule_of_Purchase_Price_All1
Schedule of Purchase Price Allocation (Parenthetical) (Detail) (USD $) | 9 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 31, 2014 |
Montecito Joint Venture | |||
Schedule of Business Acquisitions, Purchase Price Allocation [Line Items] | ' | ' | ' |
Weighted-average amortization period on the acquired lease intangibles | '7 years 1 month 6 days | '6 years 6 months | '5 years 1 month 6 days |
Acquired lease intangibles | $61.40 | $6 | $1.90 |
Acquired other lease intangibles | 25.8 | 7.3 | 0.6 |
Mortgage note payable, premium | $0.40 | ' | $0.60 |
Schedule_of_Unaudited_Proforma
Schedule of Unaudited Proforma Results of Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ||||
Revenues | $50,724 | $36,188 | $146,933 | $105,817 | ||||
Net income (loss) | ($8,963) | [1] | $2,326 | [1] | ($29,640) | [1] | ($20,756) | [1] |
Loss per share of common stock (basic and diluted) | ($0.10) | $0.04 | ($0.33) | ($0.39) | ||||
Weighted average number of shares of common stock outstanding (basic and diluted) | 93,530 | [2] | 62,864 | [2] | 88,840 | [2] | 52,663 | [2] |
[1] | The unaudited pro forma results for the quarter and nine months ended September 30, 2014, were adjusted to exclude approximately $3.1 million and $13.8 million, respectively, of acquisition related expenses directly attributable to the properties acquired during the quarter and nine months ended September 30, 2014. The unaudited pro forma results for the nine months ended September 30, 2013 were adjusted to include the approximate $13.8 million of acquisition related expenses, as if the properties acquired during the nine months ended September 30, 2014 had been acquired on January 1, 2013. The unaudited pro forma results for the quarter and nine months ended September 30, 2013 were adjusted to exclude approximately $6.3 million and $8.3 million, respectively, of acquisition related expenses directly attributable to the properties acquired during the quarter and nine months ended September 30, 2013. | |||||||
[2] | As a result of the acquired properties being treated as operational since January 1, 2013, the Company assumed approximately 18.1 million shares were issued as of January 1, 2013. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2013 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented. |
Schedule_of_Unaudited_Proforma1
Schedule of Unaudited Proforma Results of Operations (Parenthetical) (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data in Millions, unless otherwise specified | Jan. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ' |
Acquisition fees and expenses | ' | $3,729 | $6,694 | $15,726 | $9,638 |
Shares issued to fund acquisition | 18.1 | ' | ' | ' | ' |
Acquisition-related Costs | Proforma results adjusted to exclude | ' | ' | ' | ' | ' |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ' |
Acquisition fees and expenses | ' | 3,100 | 6,300 | 13,800 | 8,300 |
Acquisition-related Costs | Proforma results adjusted to include | ' | ' | ' | ' | ' |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ' |
Acquisition fees and expenses | ' | ' | ' | ' | $13,800 |
Gain_Resulted_From_Change_of_C
Gain Resulted From Change of Control in Equity Method Investment (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Montecito Joint Venture | Montecito Joint Venture | Montecito Joint Venture | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' |
Fair value of net assets acquired | $530,021 | $530,021 | $311,944 | $10,129 | $10,129 | $10,129 |
Less: Previous investment in Montecito Joint Venture | ' | ' | ' | -5,700 | -5,747 | -5,747 |
Less: Cash paid to acquire co-venture partner's interest | ' | -1,584 | ' | ' | -1,584 | -1,584 |
Gain on purchase of controlling interest of investment in unconsolidated entity | $2,798 | $2,798 | ' | ' | $2,798 | $2,798 |
Schedule_of_Real_Estate_Invest
Schedule of Real Estate Investment Properties (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real Estate Properties [Line Items] | ' | ' |
Land and land improvements | $113,455 | $59,208 |
Building and building improvements | 1,255,200 | 783,260 |
Tenant improvements | 797 | ' |
Furniture, fixtures and equipment | 33,770 | 20,339 |
Less: accumulated depreciation | -41,445 | -14,016 |
Real estate investment properties, net | 1,361,777 | 848,791 |
Real estate under development, including land | 29,720 | 17,409 |
Total real estate assets, net | $1,391,497 | $866,200 |
Real_Estate_Assets_Net_Additio
Real Estate Assets Net - Additional Information (Detail) (Real Estate Investment Properties, USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Real Estate Investment Properties | ' | ' | ' | ' |
Real Estate Properties [Line Items] | ' | ' | ' | ' |
Depreciation expense | $10.80 | $3.30 | $27.40 | $7.20 |
Real_Estates_under_Development
Real Estates under Development with Third-Party Developers (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | |
Real Estate Properties [Line Items] | ' | |
Real Estate Development Costs Incurred | $29,720 | [1] |
Remaining Development Budget | 91,225 | [2] |
Raider Ranch (Lubbock, TX) | ' | |
Real Estate Properties [Line Items] | ' | |
Developer | 'South Bay Partners, Ltd | |
Real Estate Development Costs Incurred | 3,669 | [1] |
Remaining Development Budget | 12,755 | [2] |
Wellmore of Tega Cay (Tega Cay, SC) | ' | |
Real Estate Properties [Line Items] | ' | |
Developer | 'Maxwell Group, Inc. | |
Real Estate Development Costs Incurred | 14,104 | [1] |
Remaining Development Budget | 25,050 | [2] |
Watercrest at Katy (Katy, TX) | ' | |
Real Estate Properties [Line Items] | ' | |
Developer | 'South Bay Partners, Ltd | [3] |
Real Estate Development Costs Incurred | 6,131 | [1],[3] |
Remaining Development Budget | 33,311 | [2],[3] |
HarborChase Of Shorewood (Shorewood, WI) | ' | |
Real Estate Properties [Line Items] | ' | |
Developer | 'Habor Shorewood Development, LLC | |
Real Estate Development Costs Incurred | 5,816 | [1] |
Remaining Development Budget | $20,109 | [2] |
[1] | This amount represents land and total capitalized costs for GAAP purposes for the acquisition, development and construction of the senior housing community as of September 30, 2014. Amounts include investment services fees, asset management fees, interest expense and other costs capitalized during the development period. | |
[2] | This amount includes preleasing and marketing costs which will be expensed as incurred. | |
[3] | This property is owned through a joint venture in which the Company's initial ownership interest is 95%. |
Real_Estates_under_Development1
Real Estates under Development with Third-Party Developers (Parenthetical) (Detail) | Jun. 30, 2014 | Sep. 30, 2014 |
Watercrest at Katy (Katy, TX) | ||
Real Estate Properties [Line Items] | ' | ' |
Percentage of ownership interest | 95.00% | 95.00% |
Schedule_of_Net_Book_Value_of_
Schedule of Net Book Value of Intangibles (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ||
Less: accumulated amortization, assets | ($22,484) | ($5,099) | ||
Intangible assets, net | 105,122 | 52,400 | ||
Less: accumulated amortization, liabilities | 720 | 168 | ||
Intangible liabilities, net | -11,098 | [1] | -3,136 | [1] |
In place lease intangibles | ' | ' | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ||
Gross carrying amount, assets | 112,887 | 49,642 | ||
Intangible assets, net | 91,348 | ' | ||
Above-market lease intangibles | ' | ' | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ||
Gross carrying amount, assets | 8,904 | 3,704 | ||
Gross carrying amount, liabilities | -317 | -317 | ||
Intangible assets, net | 8,076 | ' | ||
Intangible liabilities, net | -308 | ' | ||
Below-market ground lease intangibles | ' | ' | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ||
Gross carrying amount, assets | 5,815 | 4,153 | ||
Gross carrying amount, liabilities | -11,501 | -2,987 | ||
Intangible assets, net | 5,698 | ' | ||
Intangible liabilities, net | ($10,790) | ' | ||
[1] | Intangible liabilities, net are included in other liabilities in the accompanying condensed consolidated balance sheets. |
Intangibles_net_Additional_Inf
Intangibles net - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible assets | $7,100,000 | $1,300,000 | $17,400,000 | $2,300,000 |
Amortization expense on intangible liabilities | 300,000 | 100,000 | 500,000 | 100,000 |
Lease Rental Income | ' | ' | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible assets | 300,000 | 50,000 | 700,000 | 50,000 |
Amortization expense on intangible liabilities | 300,000 | ' | 500,000 | ' |
Property Operating Expenses | ' | ' | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible assets | 20,000 | 10,000 | 100,000 | 10,000 |
Depreciation And Amortization | ' | ' | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible assets | 6,700,000 | 1,300,000 | 16,700,000 | 2,300,000 |
Operating expenses | ' | ' | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible liabilities | $2,000 | ' | $6,000 | ' |
Schedule_of_Estimated_Future_A
Schedule of Estimated Future Amortization and Weighted Average Remaining Useful Life (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | ||
In Thousands, unless otherwise specified | In place lease intangibles | Above-market lease intangibles | Below-market ground lease intangibles | ||||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' | ' | ||
2014 | $7,367 | ' | $6,963 | $367 | $37 | ||
2015 | 27,477 | ' | 25,898 | 1,430 | 149 | ||
2016 | 18,109 | ' | 16,768 | 1,192 | 149 | ||
2017 | 7,936 | ' | 6,702 | 1,085 | 149 | ||
2018 | 7,404 | ' | 6,256 | 999 | 149 | ||
Thereafter | 36,829 | ' | 28,761 | 3,003 | 5,065 | ||
Intangible assets, net | 105,122 | 52,400 | 91,348 | 8,076 | 5,698 | ||
2014 | -288 | ' | ' | -2 | -286 | ||
2015 | -1,102 | ' | ' | -8 | -1,094 | ||
2016 | -1,055 | ' | ' | -8 | -1,047 | ||
2017 | -1,005 | ' | ' | -8 | -997 | ||
2018 | -932 | ' | ' | -8 | -924 | ||
Thereafter | -6,716 | ' | ' | -274 | -6,442 | ||
Intangible liabilities, net | ($11,098) | [1] | ($3,136) | [1] | ' | ($308) | ($10,790) |
Weighted average useful life, assets | ' | ' | '6 years 4 months 24 days | '7 years 7 months 6 days | '38 years 9 months 18 days | ||
Weighted average useful life, liabilities | ' | ' | ' | '38 years 7 months 6 days | '12 years 9 months 18 days | ||
[1] | Intangible liabilities, net are included in other liabilities in the accompanying condensed consolidated balance sheets. |
Operating_Leases_Additional_In
Operating Leases - Additional Information (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Operating Leased Assets [Line Items] | ' |
Weighted average remaining lease term | '8 years 3 months 18 days |
Minimum | ' |
Operating Leased Assets [Line Items] | ' |
Lease, expiration year | '2014 |
Extended lease period | '2 years |
Maximum | ' |
Operating Leased Assets [Line Items] | ' |
Lease, expiration year | '2033 |
Extended lease period | '10 years |
Triple-net lease agreements | ' |
Operating Leased Assets [Line Items] | ' |
Number of properties owned | 43 |
Total annualized property tax | 1.9 |
Single Tenant Properties | ' |
Operating Leased Assets [Line Items] | ' |
Number of properties owned | 24 |
Real estate investment properties, percentage leased under operating leases | 100.00% |
Multi Tenant Properties | ' |
Operating Leased Assets [Line Items] | ' |
Number of properties owned | 19 |
Schedule_of_Future_Minimum_Lea
Schedule of Future Minimum Lease Payments (Detail) (Non-cancellable operating leases, USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Non-cancellable operating leases | ' |
Long-term Purchase Commitment [Line Items] | ' |
2014 | $13,092 |
2015 | 52,335 |
2016 | 51,032 |
2017 | 50,442 |
2018 | 50,093 |
Thereafter | 260,436 |
Total | $477,430 |
Aggregate_Carrying_Amount_and_
Aggregate Carrying Amount and Major Classifications of Consolidated Assets and Liabilities (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Real estate investment properties, net | $1,361,777 | $848,791 | ' | ' |
Real estate under development, including land | 29,720 | 17,409 | ' | ' |
Intangible assets, net | 105,122 | 52,400 | ' | ' |
Cash | 83,483 | 44,209 | 45,482 | 18,262 |
Loan costs, net | 11,232 | 7,919 | ' | ' |
Mortgage and other notes payable | 699,591 | 438,107 | ' | ' |
Accrued development costs | 4,683 | 7,047 | ' | ' |
Other liabilities | 19,964 | 7,243 | ' | ' |
Accounts payable and accrued expenses | 17,363 | 7,887 | ' | ' |
Due to related parties | 2,654 | 3,308 | ' | ' |
VIEs | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Real estate investment properties, net | 111,838 | 72,053 | ' | ' |
Real estate under development, including land | 29,720 | 16,210 | ' | ' |
Intangible assets, net | 11,166 | 4,535 | ' | ' |
Cash | 7,314 | 727 | ' | ' |
Loan costs, net | 1,869 | 912 | ' | ' |
Other | 1,020 | 382 | ' | ' |
Mortgage and other notes payable | 84,560 | 52,596 | ' | ' |
Accrued development costs | 4,683 | 7,047 | ' | ' |
Other liabilities | 1,581 | 939 | ' | ' |
Accounts payable and accrued expenses | 829 | 309 | ' | ' |
Due to related parties | $643 | $112 | ' | ' |
Variable_Interest_Entities_VIE
Variable Interest Entities (VIEs) - Additional Information (Detail) (USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Variable Interest Entity [Line Items] | ' |
Maximum exposure to loss VIEs limits | $70 |
Summarized_Operating_Data_of_U
Summarized Operating Data of Unconsolidated Entities Income Statement (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Revenues | $2,500 | $2,489 | $7,795 | $30,688 | ||||
Operating income (loss) | 123 | 97 | 550 | 3,651 | [1] | |||
Net income (loss) | -171 | -230 | -785 | -1,007 | ||||
Income (loss) allocable to other venture partners | 3 | [2] | -522 | [2] | 390 | [2] | -2,805 | [2] |
Income (loss) allocable to the Company | -174 | [2] | 292 | [2] | -1,175 | [2] | 1,798 | [2] |
Amortization of capitalized acquisition costs | -6 | -8 | -18 | -54 | ||||
Equity in earnings (loss) of unconsolidated entities | -180 | 284 | -1,193 | 1,744 | ||||
Distributions declared to the Company | 389 | 464 | 3,512 | [3] | 3,976 | |||
Distributions received by the Company | 2,667 | [3] | 1,845 | 3,674 | [3] | 5,024 | ||
Montecito Joint Venture | ' | ' | ' | ' | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Revenues | 328 | [4] | 446 | [5] | 1,356 | [4] | 1,255 | [5] |
Operating income (loss) | 106 | [4] | 121 | [5] | 436 | [4] | 66 | [1],[5] |
Net income (loss) | 37 | [4] | 21 | [5] | 165 | [4] | -218 | [5] |
Income (loss) allocable to other venture partners | 4 | [2],[4] | 2 | [2],[5] | 17 | [2],[4] | -22 | [2],[5] |
Income (loss) allocable to the Company | 33 | [2],[4] | 19 | [2],[5] | 148 | [2],[4] | -196 | [2],[5] |
Amortization of capitalized acquisition costs | -2 | [4] | -2 | [5] | -6 | [4] | -6 | [5] |
Equity in earnings (loss) of unconsolidated entities | 31 | [4] | 17 | [5] | 142 | [4] | -202 | [5] |
Distributions declared to the Company | 313 | [4] | 357 | [5] | 659 | [3],[4] | 699 | [5] |
Distributions received by the Company | 174 | [3],[4] | 342 | [5] | 517 | [3],[4] | 342 | [5] |
CHTSunIV | ' | ' | ' | ' | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Revenues | ' | ' | ' | 24,107 | [6] | |||
Operating income (loss) | ' | ' | ' | 3,603 | [1],[6] | |||
Net income (loss) | ' | ' | ' | -46 | [6] | |||
Income (loss) allocable to other venture partners | ' | ' | ' | -1,365 | [2],[6] | |||
Income (loss) allocable to the Company | ' | ' | ' | 1,319 | [2],[6] | |||
Amortization of capitalized acquisition costs | ' | ' | ' | -36 | [6] | |||
Equity in earnings (loss) of unconsolidated entities | ' | ' | ' | 1,283 | [6] | |||
Distributions declared to the Company | ' | ' | ' | 2,990 | [6] | |||
Distributions received by the Company | ' | 1,503 | [6] | ' | 4,458 | [6] | ||
Windsor Manor | ' | ' | ' | ' | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Revenues | 2,172 | 2,043 | [5] | 6,439 | 5,326 | [5] | ||
Operating income (loss) | 17 | -24 | [5] | 114 | -18 | [1],[5] | ||
Net income (loss) | -208 | -251 | [5] | -950 | -743 | [5] | ||
Income (loss) allocable to other venture partners | -1 | [2] | -524 | [2],[5] | 373 | [2] | -1,418 | [2],[5] |
Income (loss) allocable to the Company | -207 | [2] | 273 | [2],[5] | -1,323 | [2] | 675 | [2],[5] |
Amortization of capitalized acquisition costs | -4 | -6 | [5] | -12 | -12 | [5] | ||
Equity in earnings (loss) of unconsolidated entities | -211 | 267 | [5] | -1,335 | 663 | [5] | ||
Distributions declared to the Company | 76 | 107 | [5] | 2,853 | [3] | 287 | [5] | |
Distributions received by the Company | $2,493 | [3] | ' | $3,157 | [3] | $224 | [5] | |
[1] | Includes approximately $0.3 million and $0.2 million of non-recurring acquisition expenses incurred by the Montecito and Windsor Manor joint ventures, respectively, for nine months ended September 30, 2013. | |||||||
[2] | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | |||||||
[3] | The distributions declared to the Company for the Windsor Manor joint venture during both the quarter and six months ended include approximately $2.2 million of capital proceeds from a debt refinancing; refer to "Off-Balance Sheet Arrangements" for additional information. | |||||||
[4] | In August 2014, the Company acquired its co-venture partner's 10% interest in the Montecito joint venture; refer to Note 3, "Acquisitions - Purchase of Controlling Interest in Montecito Joint Venture," for additional information. | |||||||
[5] | Represents operating results from the date of acquisition through the end of the periods presented. | |||||||
[6] | In July 2013, the Company completed the sale of its joint venture membership interest in CHTSunIV. |
Summarized_Operating_Data_of_U1
Summarized Operating Data of Unconsolidated Entities Income Statement (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 31, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Montecito Joint Venture | Montecito Joint Venture | Windsor Manor | Windsor Manor | |||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition of co-venture partner's membership interest | ' | ' | ' | ' | 10.00% | ' | ' | ' |
Capital proceeds from a debt refinancing | ' | ' | ' | ' | ' | ' | $2,200,000 | ' |
Acquisition fees and expenses | $3,729,000 | $6,694,000 | $15,726,000 | $9,638,000 | ' | $300,000 | ' | $200,000 |
Contingent_Purchase_Price_Cons2
Contingent Purchase Price Consideration - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 |
Capital Health Communities | Capital Health Communities | Capital Health Communities | Capital Health Communities | Capital Health Communities | |||||
2013 | 2014 | 2015 | |||||||
Business Acquisition, Contingent Consideration [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent purchase consideration | ' | ' | ' | $507 | $7,000 | ' | ' | ' | ' |
Operating income (loss) | -6,243 | -5,037 | -16,999 | -8,205 | ' | ' | 6,900 | 7,000 | 7,100 |
Fair value of Contingent consideration | ' | ' | ' | ' | ' | $3,200 | ' | ' | ' |
Fair_Value_of_Contingent_Purch
Fair Value of Contingent Purchase Price Consideration (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Capital Health Communities | Capital Health Communities | Business Acquisition Contingent Consideration | Business Acquisition Contingent Consideration | Business Acquisition Contingent Consideration | Business Acquisition Contingent Consideration | Business Acquisition Contingent Consideration | Business Acquisition Contingent Consideration | Business Acquisition Contingent Consideration | Business Acquisition Contingent Consideration | ||
Capital Health Communities | Capital Health Communities | Capital Health Communities | Capital Health Communities | South Bay II Communities | South Bay II Communities | South Bay II Communities | South Bay II Communities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance | ' | ' | $3,200 | $3,509 | $2,664 | $4,488 | $2,664 | ($8,500) | ' | ' | ' |
Contingent consideration in connection with acquisition | -507 | -7,000 | ' | ' | ' | ' | ' | ' | ' | -12,395 | ' |
Yield Guaranty payment received from seller | ' | ' | ' | -301 | ' | -2,601 | ' | ' | ' | ' | ' |
Change in fair value | ' | ' | ' | ' | ' | 1,321 | ' | -1,800 | ' | -1,800 | ' |
Contingent consideration payment | ' | ' | ' | ' | ' | ' | ' | 10,300 | ' | 14,195 | ' |
Ending balance | ' | ' | $3,200 | $3,208 | $2,664 | $3,208 | $2,664 | ' | ' | ' | ' |
Details_of_Indebtedness_Detail
Details of Indebtedness (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Indebtedness [Line Items] | ' | ' | ||
Mortgages payable and other notes payable | $699,842 | $438,107 | ||
Premium (discount), net | -251 | [1] | ' | |
Mortgages and other notes payable, net | 699,591 | 438,107 | ||
Revolving credit facility | 180,615 | 98,500 | ||
Total borrowings | 880,206 | 536,607 | ||
Fixed rate debt | ' | ' | ||
Indebtedness [Line Items] | ' | ' | ||
Mortgages payable and other notes payable | 373,219 | 290,817 | ||
Variable Rate Debt | ' | ' | ||
Indebtedness [Line Items] | ' | ' | ||
Mortgages payable and other notes payable | $326,623 | [2] | $147,290 | [2] |
[1] | Premium (discount), net is reflective of the Company recording mortgage note payables assumed at fair value on the respective acquisition date. | |||
[2] | As of September 30, 2014 and December 31, 2013, the Company had entered into forward-starting interest rate swaps for total notional amounts of approximately $269.4 million and $124.3 million, respectively, in order to hedge its exposure to this variable rate debt in future periods. The forward-starting interest rate swaps have a range of effective dates beginning in 2015 and continuing through the maturity date of the respective loan (ranging from 2016 through 2019). Refer to Note 12, "Derivative Financial Instruments," for additional information. |
Details_of_Indebtedness_Parent
Details of Indebtedness (Parenthetical) (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Indebtedness [Line Items] | ' | ' |
Debts swapped to fixed rates with notional amounts | $269.40 | $124.30 |
Debt settlement start year | '2015 | ' |
Debt maturity range start year | '2016 | ' |
Debt maturity range end year | '2019 | ' |
Schedule_of_Future_Principal_P
Schedule of Future Principal Payments and Maturity (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Net Balance | ' | ' |
2014 | $3,020 | ' |
2015 | 14,587 | ' |
2016 | 276,550 | ' |
2017 | 30,081 | ' |
2018 | 288,403 | ' |
Thereafter | 267,565 | ' |
Total borrowings | $880,206 | $536,607 |
Schedule_of_Indebtedness_Detai
Schedule of Indebtedness (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |||||||||||||||
In Thousands, unless otherwise specified | 30-day LIBOR | 90-day LIBOR | Mortgage and Construction Loans | Fixed rate debt | Variable Rate Debt | Pacific Northwest II Communities | Pacific Northwest II Communities | Isle at Watercrest - Mansfield | Isle at Watercrest - Mansfield | Wellmore of Tega Cay (Tega Cay, SC) | Wellmore of Tega Cay (Tega Cay, SC) | Wellmore of Tega Cay (Tega Cay, SC) | Houston Orthopedic & Spine Hospital and Medical Building | Houston Orthopedic & Spine Hospital and Medical Building | Houston Orthopedic & Spine Hospital and Medical Building | Medical Portfolio II | Medical Portfolio II | Medical Portfolio II | Claremont Medical Office | Claremont Medical Office | Claremont Medical Office | Lee Hughes Medical Building | Lee Hughes Medical Building | Lee Hughes Medical Building | |||||||||||||||||
Mortgage Loans | Mortgage Loans | Fixed rate debt | Mortgage Loans | Fixed rate debt | Construction Loan | Construction Loan | Variable Rate Debt | Mortgage Loans | Mortgage Loans | Variable Rate Debt | Mortgage Loans | Mortgage Loans | Variable Rate Debt | Mortgage Loans | Mortgage Loans | Variable Rate Debt | Mortgage Loans | Mortgage Loans | Variable Rate Debt | ||||||||||||||||||||||
Mortgage Loans | Mortgage Loans | 30-day LIBOR | Construction Loan | 90-day LIBOR | Mortgage Loans | 90-day LIBOR | Mortgage Loans | 30-day LIBOR | Mortgage Loans | 30-day LIBOR | Mortgage Loans | ||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||
Interest on Loan accrues - Fixed rate | ' | ' | ' | ' | ' | ' | ' | 4.30% | [1] | ' | 4.68% | [1],[2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||
Interest accrues on loan in addition to LIBOR | ' | ' | 0.16% | 0.24% | ' | ' | ' | ' | ' | ' | ' | ' | 5.40% | [1] | ' | ' | 2.85% | [1] | ' | ' | 2.35% | [1] | ' | ' | 2.60% | [1],[3] | ' | ' | 1.85% | [1] | ' | ||||||||||
Floor rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | [1] | ' | ' | ' | ' | ' | 0.25% | [1] | ' | ' | ' | ' | ' | ' | ' | |||||||||||||
Payment Terms | ' | ' | ' | ' | ' | ' | ' | 'Monthly principal and interest payments based on a 30-year amortization schedule | ' | 'Monthly principal and interest payments based on a total payment of $143,330 | [2] | ' | 'Monthly interest only payments through February 2019; principal and interest payments thereafter based on 25-year amortization schedule | ' | ' | 'Monthly principal and interest payments based on a 30-year amortization schedule | ' | ' | 'Monthly principal and interest payments based on 25-year amortization schedule | ' | ' | 'Monthly principal and interest payments based upon a 30-year amortization schedule | [3] | ' | ' | 'Monthly principal and interest payments based upon a 30-year amortization schedule | ' | ' | |||||||||||||
Principal and interest payments amortizable period | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | ' | '25 years | ' | ' | '30 years | ' | ' | '25 years | ' | ' | '30 years | [3] | ' | ' | '30 years | ' | ' | ||||||||||||||
Monthly principal and interest payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | $143,330 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Interest payments ending date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2019-02 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||
Maturity Date | ' | ' | ' | ' | ' | ' | ' | 5-Dec-18 | [4] | ' | 1-Jun-23 | [2],[4] | ' | 6-Feb-19 | [4] | ' | ' | 1-Jun-19 | [4] | ' | ' | 14-Jul-19 | [4] | ' | ' | 15-Jan-18 | [3],[4] | ' | ' | 5-Sep-16 | [4] | ' | ' | ||||||||
Total debt | ' | ' | ' | ' | 258,186 | 89,490 | 168,696 | ' | 62,309 | ' | 27,181 | [2] | ' | ' | 1,229 | ' | ' | 49,814 | ' | ' | 85,445 | ' | ' | 12,958 | [3] | ' | ' | 19,250 | |||||||||||||
premium,(Discount) net | -251 | [5] | ' | ' | ' | -251 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Total borrowings | $880,206 | $536,607 | ' | ' | $257,935 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||
[1] | The 30-day LIBOR and 90-day LIBOR were approximately 0.16% and 0.24%, respectively, as September 30, 2014. | ||||||||||||||||||||||||||||||||||||||||
[2] | The balance for this loan excludes a premium of $0.4 million related to the mortgage note payable assumed being recorded at fair value on the acquisition date. | ||||||||||||||||||||||||||||||||||||||||
[3] | The balance for this loan excludes a discount of $0.6 million related to the mortgage note payable assumed being recorded at fair value on the acquisition date. | ||||||||||||||||||||||||||||||||||||||||
[4] | Represents the initial maturity date (or, as applicable, the maturity date as extended). The maturity date may be extended beyond the date shown subject to certain lender conditions. | ||||||||||||||||||||||||||||||||||||||||
[5] | Premium (discount), net is reflective of the Company recording mortgage note payables assumed at fair value on the respective acquisition date. |
Schedule_of_Indebtedness_Paren
Schedule of Indebtedness (Parenthetical) (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | |
30-day LIBOR | ' | |
Debt Instrument [Line Items] | ' | |
Interest accrues on loan in addition to LIBOR | 0.16% | |
90-day LIBOR | ' | |
Debt Instrument [Line Items] | ' | |
Interest accrues on loan in addition to LIBOR | 0.24% | |
Isle at Watercrest - Mansfield | Mortgage Loans | Fixed rate debt | ' | |
Debt Instrument [Line Items] | ' | |
Loan premium | 0.4 | |
Claremont Medical Office | Mortgage Loans | 30-day LIBOR | ' | |
Debt Instrument [Line Items] | ' | |
Interest accrues on loan in addition to LIBOR | 2.60% | [1],[2] |
Claremont Medical Office | Mortgage Loans | Variable Rate Debt | ' | |
Debt Instrument [Line Items] | ' | |
Loan discount | 0.6 | |
[1] | The 30-day LIBOR and 90-day LIBOR were approximately 0.16% and 0.24%, respectively, as September 30, 2014. | |
[2] | The balance for this loan excludes a discount of $0.6 million related to the mortgage note payable assumed being recorded at fair value on the acquisition date. |
Indebtedness_Additional_Inform
Indebtedness - Additional Information (Detail) (USD $) | Apr. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Feb. 28, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Mortgage Note Payable | Mortgage Note Payable | Other notes | Other notes | Before Modification | After Modification | Revolving Credit Facility | Revolving Credit Facility | |
Property | |||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate maximum principal amount available for borrowing | $275 | ' | ' | ' | ' | $120 | $240 | ' | ' |
Additional borrowing on revolving credit | ' | ' | ' | ' | ' | ' | ' | 112.1 | ' |
Debt instrument, outstanding balance | ' | ' | ' | ' | ' | ' | ' | 180.6 | ' |
Number of Properties Collateralized | ' | ' | ' | ' | ' | ' | ' | 15 | ' |
Debt Instrument, Collateral Amount | ' | ' | ' | ' | ' | ' | ' | 266.2 | ' |
Description of covenants | ' | ' | ' | ' | ' | ' | ' | 'The Companybs Revolving Credit Facility contains affirmative, negative, and financial covenants which are customary for loans of this type, including without limitation: (i) limitations on incurrence of additional indebtedness; (ii) restrictions on payments of cash distributions except if required by REIT requirements; (iii) minimum occupancy levels for collateralized properties; (iv) minimum loan-to-value and debt service coverage ratios with respect to collateralized properties; (v) maximum leverage, secured recourse debt, and unimproved land/development property ratios; (vi) minimum fixed charge coverage ratio and minimum consolidated net worth, unencumbered liquidity, and equity raise requirements; (vii) limitations on certain types of investments and additional indebtedness; and (viii) minimum liquidity. The limitations on distributions includes a limitation on the extent of allowable distributions, which are not to exceed the greater of 95% of adjusted FFO (as defined per the loan agreement) or the minimum amount of distributions required to maintain the Companybs REIT status. | ' |
Fair value of notes payable | ' | 689.2 | 431.4 | ' | ' | ' | ' | 180.6 | 98.5 |
Carrying value of notes payable | ' | ' | ' | $669.80 | $438.10 | ' | ' | $180.60 | $98.50 |
Related_Party_Arrangements_Add
Related Party Arrangements - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ' | ' |
Operating expenses reimbursement as percentage average invested assets | 2.00% | ' |
Operating expenses reimbursement as percentage of net income | 25.00% | ' |
Bank deposits | $0.10 | $0.40 |
Annualized return of investment | 6.00% | ' |
Construction loan commitments | $6 | ' |
Fees_in_Connection_with_Offeri
Fees in Connection with Offering (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Selling commissions | $6,689 | [1] | $3,247 | [1] | $12,285 | [1] | $7,165 | [1] | ' | |
Marketing support fees | 4,524 | [1] | 3,252 | [1] | 9,937 | [1] | 8,463 | [1] | ' | |
Total offering expenses | 11,213 | 6,499 | 22,222 | 15,628 | ' | |||||
Selling commissions | 170 | [2] | ' | 170 | [2] | ' | 71 | [2] | ||
Marketing support fees | 135 | [2] | ' | 135 | [2] | ' | 70 | [2] | ||
Total offering expenses unpaid | $305 | [2] | ' | $305 | [2] | ' | $141 | [2] | ||
[1] | Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders' equity and redeemable noncontrolling interest. | |||||||||
[2] | Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. |
Schedule_of_Fees_Reimbursable_
Schedule of Fees, Reimbursable Expenses and Related Amounts Unpaid to Related Parties (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Offering costs | $1,075 | [1] | $692 | [1] | $3,442 | [1] | $2,714 | [1] | ' | |
Operating expenses | 918 | [2] | 667 | [2] | 2,402 | [2] | 1,776 | [2] | ' | |
Acquisition fees and expenses | 3,729 | 6,694 | 15,726 | 9,638 | ' | |||||
Total reimbursable expenses | 2,123 | 1,456 | 6,307 | 4,826 | ' | |||||
Investment services fees | 3,651 | [3] | 4,584 | [3] | 11,875 | [3] | 6,450 | [3] | ' | |
Disposition fee | ' | 608 | [4] | ' | 608 | [4] | ' | |||
Financing coordination fees | ' | 0 | 220 | [5] | 0 | ' | ||||
Property management fees | 2,358 | 682 | 6,118 | 1,623 | ' | |||||
Asset management fees | 2,753 | 1,208 | 5,572 | 2,795 | ' | |||||
Interest reserve and other advances | ' | [6] | ' | [6] | ' | [6] | ' | [6] | ' | |
Total reimbursable expenses, net | 10,198 | 8,207 | 29,675 | 15,661 | ' | |||||
Offering costs | 345 | [7] | ' | 345 | [7] | ' | 612 | [7] | ||
Operating expenses | 594 | [7] | ' | 594 | [7] | ' | 915 | [7] | ||
Acquisition fees and expenses | ' | ' | ' | ' | 138 | [7] | ||||
Total reimbursable expenses due | 939 | [7] | ' | 939 | [7] | ' | 1,665 | [7] | ||
Investment services fees | 523 | [7] | ' | 523 | [7] | ' | ' | |||
Financing coordination fees | ' | [7] | ' | ' | [7] | ' | ' | [7] | ||
Property management fees | 459 | [7] | ' | 459 | [7] | ' | 322 | [7] | ||
Asset management fees | 420 | [7] | ' | 420 | [7] | ' | 894 | [7] | ||
Interest reserve and other advances | 8 | [7] | ' | 8 | [7] | ' | 286 | [7] | ||
Total related amount unpaid | 2,349 | [7] | ' | 2,349 | [7] | ' | 3,167 | [7] | ||
Property Manager | ' | ' | ' | ' | ' | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Acquisition fees and expenses | 130 | 97 | 463 | 336 | ' | |||||
Reimbursable expenses | ' | ' | ' | ' | ' | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Property management fees | 728 | [8] | 295 | [8] | 1,763 | [8] | 879 | [8] | ' | |
Asset management fees | $3,696 | [9] | $1,264 | [9] | $9,510 | [9] | $2,898 | [9] | ' | |
[1] | Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders' equity and redeemable noncontrolling interest. | |||||||||
[2] | Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations. | |||||||||
[3] | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $3.7 million and $11.9 million, respectively, in investment services fees of which approximately $0.4 million and $1.6 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $4.6 million and $6.4 million, respectively, in investment service fees, of which approximately $0.5 million, was capitalized as part of its investment in the Montecito Joint Venture and the additional Windsor Manor II Communities, and included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet. Investment service fees, that are not capitalized, are recorded as acquisition fees and expenses in the accompanying condensed consolidated statements of operations. | |||||||||
[4] | Amounts are recorded as a reduction to gain on sale of investment in unconsolidated entity in the accompanying consolidated statements of operations. | |||||||||
[5] | For the nine months ended September 30, 2014, the Company incurred approximately $0.2 million in financing coordination fees, which was capitalized and included in its investment in the Windsor Manor Joint Venture. There were no financing coordination fees for the quarter and nine months ended September 30, 2013. | |||||||||
[6] | Amounts primarily consists of an interest reserve account related to the acquisition, development and construction loan ("ADC Loan") that the Company originated in June 2013. | |||||||||
[7] | Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. | |||||||||
[8] | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $0.7 million and $1.8 million, respectively, in property and construction management fees payable to the Property Manager of which approximately $0.2 million and $0.3 million, respectively, in construction management fees were capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $0.3 million and $0.9 million, respectively, in property and construction management fees payable to the Property Manager of which $0.07 million and $0.2 million, respectively, was capitalized and included in real estate under development. | |||||||||
[9] | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $3.7 million and $9.5 million, respectively, in asset management fees payable to the Advisor of which approximately $0.9 million and $3.8 million, respectively, was forgone in accordance with the terms of the Advisor Expense Support Agreement and approximately $0.1 million and $0.2 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $1.3 million and $3.4 million, respectively, in asset management fees payable to the Advisor of which approximately $0.5 million for the nine months ended September 30, 2013 was forgone in accordance with the terms of the Expense Support Agreement and approximately $0.2 million and $0.2 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. |
Schedule_of_Fees_Reimbursable_1
Schedule of Fees, Reimbursable Expenses and Related Amounts Unpaid to Related Parties (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Investment services fees | $3,651,000 | [1] | $4,584,000 | [1] | $11,875,000 | [1] | $6,450,000 | [1] |
Financing coordination fees | ' | 0 | 220,000 | [2] | 0 | |||
Asset management fees | 2,753,000 | 1,208,000 | 5,572,000 | 2,795,000 | ||||
Expense under Support Agreement | 900,000 | 500,000 | 3,800,000 | 500,000 | ||||
Windsor Manor | ' | ' | ' | ' | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Investment service fees capitalized | ' | ' | 200,000 | ' | ||||
Reimbursable expenses | ' | ' | ' | ' | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Property management fees capitalized | 700,000 | 300,000 | 1,800,000 | 900,000 | ||||
Asset management fees | 3,696,000 | [3] | 1,264,000 | [3] | 9,510,000 | [3] | 2,898,000 | [3] |
Financing coordination fees capitalized as part of investment | ' | ' | ' | ' | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Investment service fees capitalized | 400,000 | 500,000 | 1,600,000 | 500,000 | ||||
Construction management fees capitalized | 200,000 | 70,000 | 300,000 | 200,000 | ||||
Asset management fees capitalized | $100,000 | $200,000 | $200,000 | $200,000 | ||||
[1] | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $3.7 million and $11.9 million, respectively, in investment services fees of which approximately $0.4 million and $1.6 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $4.6 million and $6.4 million, respectively, in investment service fees, of which approximately $0.5 million, was capitalized as part of its investment in the Montecito Joint Venture and the additional Windsor Manor II Communities, and included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet. Investment service fees, that are not capitalized, are recorded as acquisition fees and expenses in the accompanying condensed consolidated statements of operations. | |||||||
[2] | For the nine months ended September 30, 2014, the Company incurred approximately $0.2 million in financing coordination fees, which was capitalized and included in its investment in the Windsor Manor Joint Venture. There were no financing coordination fees for the quarter and nine months ended September 30, 2013. | |||||||
[3] | For the quarter and nine months ended September 30, 2014, the Company incurred approximately $3.7 million and $9.5 million, respectively, in asset management fees payable to the Advisor of which approximately $0.9 million and $3.8 million, respectively, was forgone in accordance with the terms of the Advisor Expense Support Agreement and approximately $0.1 million and $0.2 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. For the quarter and nine months ended September 30, 2013, the Company incurred approximately $1.3 million and $3.4 million, respectively, in asset management fees payable to the Advisor of which approximately $0.5 million for the nine months ended September 30, 2013 was forgone in accordance with the terms of the Expense Support Agreement and approximately $0.2 million and $0.2 million, respectively, was capitalized and included in real estate under development in the accompanying condensed consolidated balance sheet. |
Related_Party_Arrangement_Fees
Related Party Arrangement, Fees and Expenses Incurred (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |||||||||||||
Restricted Stock | Expense Support Agreements | Expense Support Agreements | Expense Support Agreements | Expense Support Agreements | Expense Support Agreements | Expense Support Agreements | Expense Support Agreements | Expense Support Agreements | Expense Support Agreements | Expense Support Agreements | |||||||||||||||||||
Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | ||||||||||||||||||||||||
Cash distributions | Stock distributions | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||
Asset management fees | $420 | [1] | ' | $420 | [1] | ' | $894 | [1] | ' | ' | $5,166 | [2] | $5,166 | [2] | ' | ' | ' | ' | ' | ' | ' | ||||||||
Then-current offering price | ' | ' | ' | ' | ' | ' | ' | $10.14 | $10.14 | $10 | ' | ' | ' | ' | ' | ' | |||||||||||||
Restricted stock shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 510,000 | [3] | 510,000 | [3] | ' | ' | ' | |||||||||||
Distributions on Restricted Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53 | [4] | 4 | [5] | |||||||||||
Asset management fees | 2,753 | 1,208 | 5,572 | 2,795 | ' | ' | 5,166 | [2] | 884 | [2] | 3,764 | [2] | 474 | [2] | ' | ' | ' | ' | ' | ' | |||||||||
Restricted stock shares | ' | ' | ' | ' | ' | 420,000 | ' | ' | ' | ' | 510,000 | [3] | 87,000 | [3] | 371,000 | [3] | 47,000 | [3] | ' | ' | |||||||||
Cash distributions on Restricted Stock | ' | ' | $9,782 | $4,209 | ' | ' | ' | ' | ' | ' | $53 | [4] | $30 | [4] | $48 | [4] | ' | ' | ' | ||||||||||
Stock distributions on Restricted Stock | ' | ' | 1,600,000 | 700,000 | ' | ' | ' | ' | ' | ' | 4,000 | [5] | 2,000 | [5] | 4,000 | [5] | ' | ' | ' | ||||||||||
[1] | Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. | ||||||||||||||||||||||||||||
[2] | No other amounts have been forgone in connection with the Expense Support Agreements for the quarter and nine months ended September 30, 2014 and 2013, and cumulatively as of September 30, 2014. | ||||||||||||||||||||||||||||
[3] | Restricted stock shares are comprised of approximately 0.42 million issued to the Advisor and approximately 0.09 million issuable to the Advisor as of September 30, 2014. Since the vesting conditions were not met through September 30, 2014, no fair value was assigned to the restricted stock shares as the shares were valued at zero, which represents the lowest possible value estimated at vesting. In addition, the restricted stock shares were treated as unissued for financial reporting purposes because the vesting criteria had not been met through September 30, 2014. | ||||||||||||||||||||||||||||
[4] | The cash distributions have been recognized as compensation expense as issued and included in general and administrative expense in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||||||
[5] | The par value of the stock distributions has been recognized as compensation expense as issued and included in general and administrative expense in the accompanying condensed consolidated statements of operations. |
Related_Party_Arrangement_Fees1
Related Party Arrangement, Fees and Expenses Incurred (Parenthetical) (Detail) (Restricted Stock) | 9 Months Ended |
Sep. 30, 2014 | |
Restricted Stock | ' |
Related Party Transaction [Line Items] | ' |
Shares issued to Advisor | 420,000 |
Shares issuable to Advisor | 90,000 |
Amounts_Related_to_Derivative_
Amounts Related to Derivative Financial Instruments Included in Unconsolidated Entities in Condensed Consolidated Balance Sheet (Detail) (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | ||
Derivative Financial Instruments One | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of derivative contract | $12,421 | [1] | ' | |
Strike | 1.30% | [1],[2] | ' | |
Credit Spread | 2.60% | [1],[2] | ' | |
Trade date | 17-Jan-13 | [1] | ' | |
Forward date | 15-Jan-15 | [1] | ' | |
Maturity date | 16-Jan-18 | [1] | ' | |
Fair value asset (liability) | 7 | [1] | 115 | [1] |
Derivative Financial Instruments Two | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of derivative contract | 38,255 | [1] | ' | |
Strike | 2.70% | [1],[2] | ' | |
Credit Spread | 2.50% | [1],[2] | ' | |
Trade date | 6-Sep-13 | [1] | ' | |
Forward date | 17-Aug-15 | [1] | ' | |
Maturity date | 10-Jul-18 | [1] | ' | |
Fair value asset (liability) | -928 | [1] | -590 | [1] |
Derivative Financial Instruments Three | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of derivative contract | 26,067 | [1] | ' | |
Strike | 2.80% | [1],[2] | ' | |
Credit Spread | 2.50% | [1],[2] | ' | |
Trade date | 6-Sep-13 | [1] | ' | |
Forward date | 17-Aug-15 | [1] | ' | |
Maturity date | 29-Aug-18 | [1] | ' | |
Fair value asset (liability) | -689 | [1] | -435 | [1] |
Derivative Financial Instruments Four | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of derivative contract | 30,000 | [1] | ' | |
Strike | 1.10% | [1],[2] | ' | |
Credit Spread | 2.70% | [1],[2] | ' | |
Trade date | 22-Oct-13 | [1] | ' | |
Forward date | 5-Aug-15 | [1] | ' | |
Maturity date | 19-Aug-16 | [1] | ' | |
Fair value asset (liability) | -35 | [1] | -10 | [1] |
Derivative Financial Instruments Five | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of derivative contract | 29,952 | [1] | ' | |
Strike | 0.90% | [1],[2] | ' | |
Credit Spread | 4.30% | [1],[2] | ' | |
Trade date | 13-Nov-13 | [1] | ' | |
Forward date | 11-May-15 | [1] | ' | |
Maturity date | 31-May-16 | [1] | ' | |
Fair value asset (liability) | -31 | [1] | -8 | [1] |
Derivative Financial Instruments Six | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of derivative contract | 11,000 | [3] | ' | |
Strike | 3.00% | [2],[3] | ' | |
Trade date | 27-Jun-14 | [3] | ' | |
Forward date | 30-Jun-14 | [3] | ' | |
Maturity date | 30-Jun-17 | [3] | ' | |
Fair value asset (liability) | 21 | [3] | ' | |
Derivative Financial Instruments Seven | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of derivative contract | 48,415 | [1] | ' | |
Strike | 2.40% | [1],[2] | ' | |
Credit Spread | 2.90% | [1],[2] | ' | |
Trade date | 15-Aug-14 | [1] | ' | |
Forward date | 1-Jun-16 | [1] | ' | |
Maturity date | 2-Jun-19 | [1] | ' | |
Fair value asset (liability) | 206 | [1] | ' | |
Derivative Financial Instruments Eight | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of derivative contract | 84,251 | [1] | ' | |
Strike | 2.30% | [1],[2] | ' | |
Credit Spread | 2.40% | [1],[2] | ' | |
Trade date | 12-Sep-14 | [1] | ' | |
Forward date | 1-Aug-15 | [1] | ' | |
Maturity date | 15-Jul-19 | [1] | ' | |
Fair value asset (liability) | ($330) | [1] | ' | |
[1] | Amounts related to interest rate swaps held by the Company or its subsidiaries, which are recorded at fair value and included in either other assets or other liabilities in the accompanying condensed consolidated balance sheets. | |||
[2] | The all-in rates for each derivative financial instrument are equal to the sum of the Strike and Credit Spread detailed above. | |||
[3] | Amounts related to the interest rate cap held by the Windsor Manor Joint Venture for which the proportionate amounts of fair value relative to the Company's ownership percentage are included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheets. |
Equity_Additional_Information_
Equity - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Equity [Line Items] | ' | ' | ' |
Redeemable noncontrolling interest in joint venture | 5.00% | ' | ' |
Aggregate offering proceeds received from public offering | $914,800,000 | ' | $568,900,000 |
Shares issued from public offering | 91,200,000 | ' | 57,000,000 |
Cash distribution declared | 21,677,000 | 9,000,000 | 14,170,000 |
Stock distributions, shares | 1,600,000 | 700,000 | ' |
Percentage of cash distribution considered taxable | 21.50% | ' | ' |
Percentage of cash distribution considered as return of capital | 78.50% | 100.00% | ' |
Amounts distributed to stockholders | 0 | 0 | ' |
Redemptions of common stock | 2,124,000 | ' | 827,000 |
Common Stock Redemption | ' | ' | ' |
Equity [Line Items] | ' | ' | ' |
Redemption of common stock, shares | 200,000 | 80,000 | ' |
Redemption of common stock, per share | $9.13 | $9.27 | ' |
Redemptions of common stock | 2,100,000 | 700,000 | ' |
Reinvestment Plan | ' | ' | ' |
Equity [Line Items] | ' | ' | ' |
Aggregate offering proceeds received from public offering | $21,300,000 | ' | $9,400,000 |
Shares issued from public offering | 2,200,000 | ' | 1,000,000 |
Effect_of_Derivative_Financial
Effect of Derivative Financial Instruments (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) reclassified from AOCI into earnings (Effective Portion) | ' | ' | ' | ' |
Derivative instruments, gain (loss) recognized in other comprehensive income, effective portion | 222 | -1,299 | -851 | -1,168 |
Interest Rate Swap | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) reclassified from AOCI into earnings (Effective Portion) | ' | ' | ' | ' |
Derivative instruments, gain (loss) recognized in other comprehensive income, effective portion | 224 | -1,230 | -872 | -1,230 |
Interest Rate Cap Held by Unconsolidated Joint Venture | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) reclassified from AOCI into earnings (Effective Portion) | ' | ' | ' | ' |
Derivative instruments, gain (loss) recognized in other comprehensive income, effective portion | -2 | ' | 21 | ' |
Interest Rate Swap Held by Unconsolidated Joint Venture | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) reclassified from AOCI into earnings (Effective Portion) | ' | ' | ' | ' |
Derivative instruments, gain (loss) recognized in other comprehensive income, effective portion | ' | ($69) | ' | $62 |
Components_of_Income_Tax_Benef
Components of Income Tax Benefit (Expense) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 |
Current: | ' | ' | ' |
Federal | ' | ' | $13 |
State | -37 | -9 | ' |
Total current benefit (expense) | -37 | -9 | 13 |
Deferred: | ' | ' | ' |
Federal | ' | ' | -25 |
State | ' | ' | -6 |
Total deferred expense | ' | ' | -31 |
Income tax benefit (expense) | ($37) | ($9) | ($18) |
Significant_Components_of_Defe
Significant Components of Deferred Tax Assets (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Schedule of Deferred Tax Assets and Liabilities [Line Items] | ' |
Carryforwards of net operating loss | $1,787 |
Prepaid rent | 337 |
Valuation allowance | -2,124 |
Net deferred tax assets | ' |
Reconciliation_of_Income_Tax_B
Reconciliation of Income Tax Benefit (Expense) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Reconciliation Of Income Taxes [Line Items] | ' | ' | ' | ' |
Tax expense computed at federal statutory rate | ($4,259) | ($806) | ($12,957) | ($3,130) |
Benefit of REIT election | 4,259 | 806 | 12,957 | 3,118 |
State income tax expense | -37 | ' | -9 | -6 |
Income tax benefit (expense) | ($37) | ' | ($9) | ($18) |
Tax expense computed at federal statutory rate | -35.00% | -35.00% | -35.00% | -35.00% |
Benefit of REIT election | 35.00% | 35.00% | 35.00% | 34.86% |
State income tax expense | -0.30% | ' | -0.02% | -0.07% |
Income tax expense | -0.30% | ' | -0.02% | -0.21% |
Ground_and_Air_Rights_Leases_A
Ground and Air Rights Leases - Additional Information (Detail) (Ground and Air Rights Leases, USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Ground and Air Rights Leases | ' | ' | ' | ' |
Operating Leased Assets [Line Items] | ' | ' | ' | ' |
Lease, expiration year | ' | ' | '2053 | ' |
Operating lease rental expense | $0.04 | $0.03 | $0.10 | $0.03 |
Schedule_of_Future_Minimum_Lea1
Schedule of Future Minimum Lease Payments under ground and air rights leases (Detail) (Ground and Air Rights Leases, USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Ground and Air Rights Leases | ' |
Long-term Purchase Commitment [Line Items] | ' |
2014 | $54 |
2015 | 217 |
2016 | 220 |
2017 | 223 |
2018 | 227 |
Thereafter | 21,846 |
Total | $22,787 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 27, 2011 | Nov. 04, 2014 | Nov. 01, 2014 | Oct. 01, 2014 | Nov. 03, 2014 | Nov. 04, 2014 | Nov. 01, 2014 | Oct. 01, 2014 | Nov. 04, 2014 | Nov. 04, 2014 | Nov. 04, 2014 | Nov. 04, 2014 | Nov. 04, 2014 | Nov. 04, 2014 | |
Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | |||||
Follow-On Offering | Follow-On Offering | Follow-On Offering | Cash distributions | Stock distributions | Stock distributions | ||||||||||||
Before Amendment | After Amendment | ||||||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional subscription received | ' | ' | ' | ' | ' | ' | ' | $63,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional subscription proceeds received, shares | ' | ' | ' | ' | ' | ' | ' | 6,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly cash distribution, per share | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 | $0.03 | $0.03 | ' | ' | ' | ' | ' | ' |
Stock distribution, shares | 1,600,000 | 700,000 | ' | ' | 0.0025 | 0.0025 | 0.0025 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and stock distribution to be paid and distributed, date | 31-Dec-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total annualized distribution rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | 3.00% |
Stock distribution, shares per 100 outstanding common shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' |
Common stock offering price per share | ' | ' | ' | $10.14 | ' | ' | ' | ' | $10.58 | ' | ' | ' | ' | ' | ' | ' | ' |
Offering price for reinvestment plan | ' | ' | ' | $9.64 | ' | ' | ' | ' | $10.06 | ' | ' | ' | ' | ' | ' | ' | ' |
Subscriptions received for common stock | $345,854,000 | ' | $387,363,000 | ' | ' | ' | ' | ' | ' | ' | ' | $1,000,000,000 | $750,000,000 | $1,000,000,000 | ' | ' | ' |